.11'.-:'! 


THE  LIBRARY 

OF 

THE  UNIVERSITY 

OF  CALIFORNIA 
LOS  ANGELES 


THE  PRICE 

OF 

INEFFICIENCY 


BY 

FRANK  KOESTER 

Associate  Member  American  Institute  of  Electrical  Engineers 

Member  Society  for  Promotion  of  Engineering  Education 

Member  Society  German  Engineers  (Berlin) 

Author  of  "Hydroelectric  Developments  and  Engineering,"  "Steam 

Electric  Power  Plants,"  "Elecricity  for  the  Farm  and 

Home,"  "American  City  Planning,"  etc. 


mew  ISocft 

STURGIS  &  WALTON 

COMPANY 

1913 

All  Rights  Res$rv«d 


Copyright,  191S 
By  STURGIS  &  WALTON  COMPANY 


Set  up  and  electrotyped.    Published,  March,  191S 


HC 

IOC 


* '  The  true  measure  of  a  man 's  success  is  the 
service  which  he  renders,  not  the  pay  he  ex- 
acts for  it.  The  true  measure  of  a  man's 
ability  is  the  power  to  help  others  and  to  con- 
tribute to  their  advancement.  The  effort  to 
make  money  is  an  important  incentive  to  so- 
cial service  and  industrial  progress;  but  the 
amount  of  wealth  each  man  acquires  is  no  ac- 
curate indication  of  the  service  he  has  rend- 
ered or  the  progress  he  has  made  possible. ' ' 

President  ILvdley  of  Yale. 


14S10G1 


PREFACE 

The  great  burden  of  inefficiency,  with  its  terrible  cost,  is  a  bur- 
den that  is  carried  on  the  shoulders  of  each  and  every  one  of  us. 
"Whatever  your  income  may  be,  much  or  little,  increasing  or  de- 
creasing, you  are  paying  your  full  share  in  one  form  or  another 
of  the  waste,  which  amounts  to  over  ten  billions  of  dollars  an- 
nually; a  waste  that  means  that  forty  cents  of  every  dollar  you 
earn  goes  for  nothing. 

You  are  paying  this,  the  price  of  inefficiency,  in  a  thousand 
different  ways  for  your  personal  negligence  in  not  taking  the 
interest  that  you  should  in  the  business  and  governmental  affairs 
of  the  countrA'^  and  in  your  own  private  concerns. 

What  it  is  possible  for  you  to  do  to  reduce  the  frightful  costs 
of  inefficiency,  what  you  should  do  and  what  you  must  do,  is  a 
question  the  responsibility  for  which  you  cannot  escape.  If  you 
remain  merely  neutral,  you  bear  the  loss  just  as  surely,  since  the 
government,  city,  state  and  national,  your  employer,  your  em- 
ployees, and  your  friends  will  be  all  the  more  active  in  their 
work  of  reducing  your  resources,  cheating  or  robbing  you,  both 
directly  and  indirectly,  and  adding  to  the  costs  due  to  your  in- 
efficiency as  a  recreant  member  of  a  government,  the  individuals 
of  which  must  rule  themselves  as  a  body,  if  they  are  not  to  be 
ruled  by  bosses,  minorities  and  combinations. 

A  little  well  directed  individual  effort,  which  will  become  a 
matter  of  habit,  will  suffice  to  effect  vast  reductions  in  the  price 
of  inefficiency.  Even  the  knowledge  of  where  the  waste  is,  will 
in  many  cases  call  forth  the  remedy,  though  in  other  cases 
entirely  new  principles  must  be  called  into  action. 

It  is  the  purpose  of  this  book  to  show  where  the  frightful 
wastes  are  being  incurred,  in  governmental,  and  industrial, 
social  and  educational  affairs,  to  point  out  remedies  for  reducing 
them  to  a  minimum  or  eliminating  them  entirely,  and  to  indicate 
new  principles  which  may  often  operate  not  only  to  reduce  and 
eliminate  inefficient  methods,  but  to  leave  the  field  clear  for 
efficiency. 

It  is  of  tremendous  importance  to  the  nation  to  take  a  stand 


vi  PREFACE 

for  betterment.  Conditions  will  grow  worse  unless  they  are 
made  to  grow  better,  and  the  problems  which  are  so  acute  and 
pressing  cannot  be  solved  by  parties  or  by  statesmen,  by  legis- 
lators or  committees,  but  must  be  solved  by  the  spontaneous  and 
irresistible  effect  of  public  sentiment  and  individual  action. 
There  is  something  for  everyone  to  do,  and  when  the  extent  and 
gravity  of  the  situation  is  understood,  no  one  will  hesitate  to  do 
his  part.  It  is  the  duty  of  those  who  are  acquainted  with  the 
facts  to  make  them  more  widely  known,  and  in  this  respect  the 
influence  of  the  press  is  of  the  greatest  consequence,  and  a 
patriotic  and  non-partisan  espousal  of  the  cause  of  efficiency  on 
their  part  and  a  genuine  and  persistent  attention  to  the  subject 
cannot  fail  to  be  reflected  in  increased  prosperity  for  all  con- 
cerned. Newspapers  should  devote  their  attention  systematic- 
ally to  the  matter,  treating  every  phase  of  it  in  a  constructive 
way,  pointing  out  how  efficiency  is  to  be  obtained  and  how  much 
it  means. 

Not  alone  will  the  interests  of  the  public  be  served  but  their 
own  as  well,  by  increased  circulation  and  increased  advertising 
and  by  the  influx  of  new  firms  with  new  advertising.  The  prop- 
aganda of  efficiency  will  mean  increased  prosperity  for  every 
paper  and  every  reader,  and  no  editor  can  serve  his  country,  his 
public  and  his  paper  better  than  by  a  thorough  and  persistent 
attention  to  efficiency. 

Efficiency  is  not  a  thing  reserved  for  the  comprehension  of 
the  elect.  It  is  not  a  thing  to  be  called  ''scientific  management" 
and  used  as  a  bug-a-boo ;  it  is,  on  the  contrary,  nothing  but  com- 
mon sense  applied  to  every  day  affairs,  the  doing  of  a  thing  in 
a  better,  quicker  and  more  economical  way  than  at  present,  the 
doing  of  a  thing  in  the  right  way,  the  easy,  the  adept,  the 
direct  and  natural  way,  rather  than  in  the  careless,  the  slovenly, 
the  wrong  and  the  round-about  way. 

Efficiency  has  a  widespread  application  and  may  be  practiced 
in  a  widespread  manner  and  by  every  one,  in  some  form  or  an- 
other. Efficiency  is  the  duty,  not  only  of  every  man  to  himself, 
but  of  every  man  to  his  neighbor.  It  is  a  slogan  that  means 
prosperity  and  a  watchword  of  honest  effort  and  well  directed 
energy. 

If  a  hundred  men  have  a  certain  work  to  perform,  week  in 
and  week  out,  a  few  of  them  will  presently  be  found  to  execute 
the  work  with  greater  ease  and  dispatch  than  the  rest,  and  of 
these  few,  one  will  be  found  who,  with  less  expenditure  of  energy 


PREFACE 


vu 


and  time  than  any  of  the  others,  accomplishes  the  work  better. 
That  man  is  the  efficient  man,  and  he  has  evolved  the  efficient 
raetliod.  That  method  should  be  made  known  to  all  and  fol- 
lowed by  all,  and  a  high  degree  of  efficiency  will  be  the  result 
for  all.  The  inferior  methods  of  the  others  are  costly  and  should 
be  discarded  without  delay.  Those  who  are  willing  to  learn  will 
progress,  but  those  who  cling  to  their  old  methods  and  refuse 
to  learn  will  fail. 

This  is  true  not  only  of  individuals  but  of  nations  as  well, 
and  it  is  a  criminal  waste  of  time  and  resources  not  to  adopt 
methods  which  have  proved  themselves  the  right  ones  elsewhere, 
but  instead  either  to  stick  to  old  methods  or  experiment  along 
lines  which  have  already  been  gone  over. 

Every  possible  improvement  should  be  known  and  considered 
instead  of  being  ignored  until  it  forces  its  way  into  use.  In- 
stead of  the  ready  excuse  when  a  new  thing  comes  out  elsewhere, 
that  it  is  not  applicable  to  our  conditions,  it  should  be  made 
applicable.  INferit  should  be  sought  out  wherever  it  may  be 
found,  instead  of  being  choked  off  and  forced  to  fight  its  half 
starved  way  to  the  front. 

As  long  as  a  man  is  satisfied  that  he  has  nothing  more  to  learn, 
he  will  learn  nothing  more,  but  when  he  realizes  that  he  is  not 
yet  the  master  of  the  accumulated  know^ledge  of  the  world  on 
his  subject,  he  will  progress.  Once  in  the  swing  and  step  of 
progi-ess,  he  can  readily  keep  abreast  of  his  competitors  and 
apply  to  his  own  problems  the  results  which  have  been  and  are 
constantly  being  achieved  by  others. 

It  was,  at  the  outset,  the  intention  to  make  this  volume  a 
brief  exposition  of  certain  of  the  more  noticeable  phases  of  in- 
efficiency, but  in  compiling  the  data  and  in  seeking  out  the 
underlying  causes  for  inefficiency,  new  and  more  profound 
causes  appeared. 

It  was  as  if  an  underground  city  of  decay  had  been  entered, 
avenue  after  avenue  of  inquiry  presented  itself  and  at  every 
turn  new  and  greater  vistas  of  crumbling  walls  and  tottering 
pillars  appeared.  Overhead  the  world  takes  its  way,  with  here 
and  there  a  sinking  of  the  street  or  an  upheaval  of  the  surface. 
Beneath,  the  foundations  are  undermined  by  neglect,  careless- 
ness, graft,  self-satisfaction,  disrespect  of  authority,  lack  of 
discipline,  faulty  education,  lawlessness,  suspicion,  waste,  squan- 
dering of  resources,  extravagance,  crooked  dealing,  monopoly, 
indolence,  superficiality  and  politics;  a  stupendous  labyrinth  of 


^"  PREFACE 

destructive  forces,  which  mean  national  disaster  if  fundamental 
and  comprehensive  measures  for  correction  are  not  undertaken 
at  once. 

As  in  the  design  and  construction  of  a  great  engineering  work, 
where  the  whole  and  its  various  components  must  be  suited  to 
the  requirements  to  be  met,  so  the  governmental,  social,  econom- 
ical and  business  organization  of  a  country  must  be  suited  to  con- 
ditions if  disaster  is  not  to  be  encountered. 

Like  a  great  dam  which  conserves  enormous  resources  of 
energy  in  storing  millions  of  gallons  of  water,  so  must  the  social 
structure  conserve  the  energy  of  humanity  and  utilize  it  for  the 
benefit  of  humanity. 

Unless  the  dam  be  properly  calculated,  and  of  the  right  de- 
sign ;  constructed  of  the  best  materials  and  erected  on  a  firm 
foundation,  it  will  soon  begin  to  show  evidence  of  failure ;  crev- 
ices will  appear,  the  true  alignment  be  lost  and  the  relief  gates 
jammed.  Although  expedients  be  adopted,  crevices  patched  and 
reenforcements  applied,  if  the  weakness  is  in  the  original  design 
the  time  will  come  when  nothing  further  will  avail,  when  the 
dam  cannot  be  saved  and  when  it  is  destined  to  carry  death  and 
destruction  in  its  final  collapse. 

So  with  the  social  machineiy  of  a  country.  If  it  be  not  rightly 
constructed,  if  the  attitude  of  the  individuals  to  each  other  and 
to  the  government,  and  the  attitude  of  the  government  toward 
the  individual  be  not  properly  founded  in  mutual  respect  and 
self  respect,  no  amount  of  patching  can  save  the  structure.  And 
though  the  disaster  may  be  far  reaching,  it  will,  as  in  the  case 
of  the  failure  of  the  dam,  at  least  wipe  out  old  mistakes  and 
makeshifts,  and  leave  the  ground  clear  for  the  work  of  new  engi- 
neers, who,  profiting  from  experience  of  the  past,  and  with 
sounder  theory  and  more  thorough  practice,  will  erect  a  struc- 
ture capable  of  withstanding  the  stresses  to  which  it  ■will  be  sub- 
jected and  capable  of  utilizing  the  accumulated  forces  to  the 
greatest  possible  advantage. 

Such  an  improved  social  structure  once  established  will,  like 
a  dam  using  the  energy  of  the  stored  water  to  turn  a  multitude 
of  gonorators,  distributing  onorgA'  in  other  forms  throughout  the 
surrounding  country  and  stimulating  its  production  similarly, 
infuse  a  new  stinnilus  to  the  whole  life  of  the  nation,  both  in  the 
present  and  in  the  future. 

The  great  extent  and  doep-rootedness  of  the  evils  of  the  situ- 
ation cannot  be  comprehended  by  the  individual  who  does  not 


PREFACE  ^ 

take  a  broad  and  public-spirited  view  of  conditions.  It  is  in- 
deed appalling  when  seen  as  a  whole,  and  the  lack  of  real  patri- 
otic interest  in  the  country,  taken  by  its  citizens,  is  a  reproach 
and  a  menace  of  impending  disaster. 

The  neglect  of  the  individual  extends  not  only  to  the  nation's 
affairs,  but  to  his  own,  and  it  is  only  after  a  realization  of  how 
general  is  this  condition,  that  the  individual  can  be  expected  to 
see  that  only  by  a  thorough  readjustment  of  his  own  attitude 
and  affairs,  can  he  do  his  part  in  the  new  scheme  of  things  that 
must  come  into  existence,  if  we  are  not  to  descend  to  far  more 
serious  conditions. 

That  a  grave  situation  exists  cannot  be  denied,  but  that  con- 
ditions may  be  improved  is  equally  patent,  as  shown  by  what 
exists  abroad,  where  a  more  advanced  and  efficient  public 
opinion  has  found  a  means  of  enforcing  itself. 

It  would  be  impossible  for  any  one  person  to  speak  with  au- 
thority on  subjects  so  complex  and  varied  as  must  go  to  make 
up  a  broad  review  of  national  conditions,  but  in  every  depart- 
ment the  situation  has  been  analysed  by  experts,  and  wherever, 
herein,  conclusions  have  been  advanced,  they  are  based  on  ac- 
cumulated experience  and  fortified  by  the  highest  authorities. 
The  reports  of  the  federal  government,  census  reports,  state  and 
national  authorities  and  specialists  have  been  freely  quoted,  so 
that  it  is  believed  that  in  every  important  particular,  corrobora- 
tion will  be  found  for  any  statements  advanced. 

Although  it  might  appear  that  much  of  the  matter  is  of  a 
negative  or  critical  nature,  there  will  be  found  no  small  amount 
of  constructive  criticism,  that  is  to  say  suggestions  for  actually 
remedying  conditions.  Americans  are,  unfortunately,  not  prone 
to  criticism,  and  are  much  imposed  upon  in  consequence.  Their 
proverbial  generosity  and  magnanimity  are  too  much  taken  ad- 
vantage of.  A  more  critical  spirit  could  not  fail  to  have  a 
stimulating  effect,  and  while  many  of  the  criticisms  here  made 
might  appear  antagonistic  if  from  the  pen  of  a  passing  visitor, 
yet  as  the  author  has  been  a  resident  of  some  ten  years'  standing, 
continually  active  in  business  and  professional  life,  and  has  be- 
come a  citizen  and  oast  his  fortunes  here  permanently,  it  will 
be  seen  that  the  criticisms  are  as  of  one  member  of  a  family  to 
another,  intended  for  the  common  good  and  for  the  remedying 
of  conditions  from  wliich  we  all  suffer  alike. 

The  volume  is  not  intended,  however,  in  any  way  to  be  a  com- 
prehensive resume  of  American  life  or  institutions,  and  any 


^  PREFACE 

general  conclusions  should  not  be  attempted  to  be  drawn  from 
it,  for  the  many  admirable,  not  to  say  unparalleled,  activities 
of  American  life  are  but  seldom  referred  to.  The  pui^pose  of 
this  book  is  not  to  praise  nor  sit  in  judgment  nor  to  attempt  a 
broad  summary,  but  to  point  out  defects  and  shortcomings 
which  are  much  more  apparent  to  one  with  foreign  experience 
than  to  one  to  the  manner  born,  defects  and  shortcomings  which 
perhaps  on  that  account  have  gone  if  not  unnoticed,  at  least  un- 
remedied. 

For  the  quotations  made  throughout  the  book,  the  author  begs 
to  acknowledge  the  courtesy  extended  by  the  several  authors 
and  publishers.  It  is  through  this  courtesy  that  the  author 
hopes  to  have  made  the  book  an  authoritative  presentation  of 
the  various  subjects. 

It  is  hoped  that  the  work  will  be  received  in  the  spirit  in- 
tended, that  of  helpful  and  constructive  criticism,  and  that  it 
vnM  be  of  assistance  in  promoting  a  better  understanding  of  the 
great  cohesive  force  of  social  life,  the  fuller  co-operation  of  indi- 
viduals with  each  other  and  with  the  state,  of  the  state  with  the 
individual,  and  of  the  states  of  the  world  with  each  other. 

F.  K. 
March,  1913, 
New  York  City. 


CONTENTS 

Pbefack       ^ 

Introduction         ^'" 

I    The  Situation 3 

II    OuB  Political  System ^ 

III  Administrative  Waste 22 

IV  What  is  Conservation? 32 

V    Conservation  of  Human  Life 44 

VI  By-Products  of  Inefficiency 54 

VII  Private  Monopoly '^^ 

VIII  Governmental   Socialism 83 

IX  Governmental  Socialism  in  Germany 96 

X  Municipal  Socialism 115 

XI  Commission  Government 142 

XII  Industrial  Handicaps  I 160 

XIII  Industrial  Handicaps  II 182 

XIV  How  to  Supplant  the  Trusts 202 

XV  Business  is  Business 215 

XVI     Stimulating  Progress 248 

XVII    Undeveloped  Resources 257 

XVIII     The  Problem  of  Immigration 283 

XIX    The  Eight  to  Work 293 

XX    Social  Insurance 314 

XXI     Tom,  Dick  and  Harry 330 

XXII    Cutting  Out  the  Middleman 346 

XXIII     Public  Welfare 358 

XXIV    Domestic  Relations 379 

XXV    Educational  Systems 385 

XXVI    The  Remedies 414 

X  427 

Index *^' 


INTRODUCTION 

Unrest  and  turmoil  are  the  order  of  the  times,  protest  and 
animosity  show  themselves  at  evei*y  hand,  and  hatred  and  hope- 
lessness, bitter  distrust  and  denunciation  govern  our  relations 
as  classes  and  as  individuals. 

We  are  facing  an  acute  but  intensely  complicated  crisis  in  the 
existence  of  the  nation,  and  the  contributing  causes  are  numer- 
ous and  grave,  with  remedies  difficult  to  understand  and  more 
difficult  to  apply.  The  country  is  like  a  giant,  bound  hand  and 
foot  and  tormented  on  every  side,  in  an  intolerable  situation 
but  hopeless  of  any  relief. 

We  confront  conditions,  not  theories.  Familiar  with  great 
prosperity  and  accustomed  to  the  swing  of  progress,  there  seemed 
no  bounds  which  w^e  might  not  permit  ourselves;  and  thus  the 
awakening  is  all  the  more  abrupt  and  severe,  and  the  present 
stagnation  all  the  more  keenly  felt. 

A  young  nation  A\dth  vast  natural  resources,  the  fair  way 
ahead  was  free  and  clear,  but  suddenly  we  find  that  our  re- 
sources have  been  squandered  and  are  approaching  exhaustion, 
that  we  have  been  betrayed  by  our  financiers  and  politicians  and 
led  into  the  blind  alley  of  disaster. 

Though  being  a  self-satisfied  people,  we  are  yet  unable  to 
assert  ourselves  at  the  right  juncture  in  our  own  interests.  We 
cannot  kick  and  kick  vigorously  enough  at  the  right  time  and 
place,  and  we  are  continually  getting  deeper  and  deeper  into 
trouble.  In  a  national  crisis  of  this  kind,  the  statesmanship  of 
a  country  should  be  its  guiding  light,  but  where  are  our  states- 
men to  be  found?  Where  are  our  leaders  who  are  not  chiefly 
concerned  with  their  own  political  interests.  A  government 
should  be  an  inspiration  and  a  guiding  force,  an  encouragement 
for  industry  and  business,  but  instead  of  exhibiting  such  a  firm 
and  fruitful  policy,  our  administration  is  one  of  waste  and  gross 
inefficiency. 

With  statesmanship  such  as  America  should  command,  the 
dangerous  shoals  we  are  now  encountering,  would  long  ago  have 
been  avoided.  With  patriotic  and  disinterested  hands  at  the 
helm  of  state,  such  dangers  would  have  been  clearly  seen  and 

xiii 


xiv  INTRODUCTION 

avoided,  whereas  now  the  vessel  of  government  is  crushing  first 
against  Scylla  on  one  side  and  tossed  by  Charybdis  on  the  other. 

The  government  may  be  charged  and  unanswerably  charged 
with: 

Ruining  of  prosperity  for  petty  partisan  advantage; 

Creating  industrial  unrest  and  turmoil; 

Destruction  of  confidence  of  the  public  in  the  state; 

Unexampled  waste  of  natural  resources; 

Gross  administrative  inefficiency  and  incompetency; 

Restriction  of  industrial  development; 

Crippling  business  enterprises; 

Neglect  of  agricultural  needs  and  a  failure  to  check  enormous 
waste  of  farm  products; 

Sacrifice  of  countless  lives  in  unregulated  industrial  establish- 
ments ; 

Negligence  in  combatting  industrial  diseases; 

Administrative  self  interest,  waste  and  graft; 

Inadequacy  and  insufficiency  of  the  law; 

Failure  to  cope  with  monopolies; 

Failure  to  prevent  adulteration  of  foods; 

Continuance  of  a  deceptive  and  destructive  patent  system; 

Autocratic  administration  of  the  post  office; 

Continuance  of  shameful  pension  frauds; 

Promoting  the  spirit  of  lawlessness  and  disrespect  for  law; 

A  wrongful  immigration  policy. 

\Vhile  these  are  among  the  principal  items  directly  chargeable 
to  the  government,  a  more  considerably  responsibility  is  charge- 
able to  its  failure  to  take  constructive  action.  The  government 
is  negligent  in  that  it 

Fails  to  modernize  the  constitution ; 

Fails  to  provide  an  adequate  and  i)roper  educational  system ; 

Fails  to  link  the  educational  system  with  practical  life  through 
not  compelling  the  learning  of  a  means  of  livelihood  on  the  part 
of  every  citizen; 

Denies  the  right  to  work; 

Fails  to  protect  small  industries  from  the  aggression  of  mo- 
nopolies; 

Neglects  to  provide  a  national  testing  plant  for  the  promotion 
of  manufacture; 

Fails  to  provide  industrial  insurance  systems  for  accident, 
sickness  and  old  age. 

Improperly  develops  waterways ; 


INTRODUCTION 


XV 


Does  not  cause  the  administration  to  command  the  respect  of 
the  public; 

Does  not  obviate  mismanagement  of  railway  and  industrial 
plants ; 

Does  not  cause  the  servants  of  the  public  to  realize  that  they 
are  the  servants  of  the  public ; 

Fails  to  prevent  the  congestion  of  wealth  in  the  hands  of  the 
few; 

Fails  to  diminish  the  controversy  between  capital  and  labor; 

Fails  to  command  the  respect  and  good  will  of  foreign  com- 
merce ; 

Fails  to  promote  our  merchant  marine; 

Fails  to  adopt  a  constructive  diplomatic  policy. 

The  machinery  of  the  government  and  the  personnel  which  has 
been  evolved  to  administer  its  affairs  is  incompetent  and  in- 
efficient. It  is  in  a  state  of  break  down,  is  unable  to  cope  with 
conditions  which  it  has  created  and  its  deplorable  and  destruc- 
tive and  desperate  activities  are  like  a  huge  machine  grinding 
itself  to  pieces.  The  situation  is  acute  and  demands  the  careful 
thought  and  vigorous  action  of  every  citizen. 

Incompetency  and  inefficiency  are  not  alone  confined  to  high 
places;  they  take  their  noisome  course  through  the  whole  body 
of  the  government. 

As  Superintendent  of  Insurance,  William  H.  Hotchkiss  of 
New  York,  in  a  recent  newspaper  interview  said :  "The  times  are 
out  of  joint. 

' '  Never  before  was  enlightened  public  service  more  in  demand. 
Indeed,  may  we  not  well  turn  aside  from  insurance  problems 
and  for  the  moment  glance  at  the  problems  with  which  all  Amer- 
icans are  now  concerned?  Whither  are  we  of  a  great  republic 
drifting?  Labor  glowers  and  threatens  an  industrial  war.  Big 
business  shakes  -snth  ague.  Capital  is  dissatisfied,  prosperity 
is  checked.  The  people  call  loudly  for  retributory  law  against 
manager  and  magnate.  Strong  arm  methods  toward  great  cor- 
porations are  in  full  operation  in  nation  and  state.  Commerci- 
ally speaking  our  times  are  out  of  joint.  Likewise  our  politics. 
The  people's  legislators  long  since  lost  the  people's  confidence. 
Their  executives  must  now  exceed  the  written  law  or  lose  in 
power  and  usefulness.  Their  judges  even  are  threatened  with 
recall. 

"Parties  once  potent  are  going  to  pieces  as  the  voters  right- 
fully gain  the  power  to  nominate  their  public  servants.     Social- 


xvi  INTRODUCTION 

ism — of  the  right  or  of  the  wrong  sort — is  winning  converts 
every  day.  The  cloistered  citizen  of  the  kid  gloved  wards  is  be- 
ginning to  have  his  say,  while  the  horse  block  orator  is  harangu- 
ing an  audience  that  may  any  moment  become  a  mob." 

The  government,  which  includes  not  only  the  ever  changing 
federal  administration,  and  its  legislative  and  judicial  branches, 
and  the  governments  of  the  states  as  well,  are  as  open  to  criticism 
as  the  most  outrageous  of  the  tnists.  The  ensemble  governments 
of  the  United  States,  in  their  mountebank  struggle  with  con- 
ditions passed  some  44,000  laws  in  1910. 

In  the  words  of  ex-Governor  Herrick  of  Ohio,  there  were: 

"Laws  to  regulate  everybody  and  everything  except  the  pub- 
lic exi)euditures  of  the  law-makers  themselves  and  of  the  various 
departments  of  the  government.  The  great  majority  of  men 
sitting  in  our  legislative  bodies  are  lawyers,  whose  natural  ten- 
dency is  to  attempt  to  remedy  every  ill  by  a  statute. 

"The  oversight  of  business  enterprises  by  the  government  has 
plai'od  on  the  government  payrolls  a  vast  number  of  officials;  it 
has  necessitated  the  establishment  of  new  departments,  the  keep- 
ing of  a  mass  of  records  and  the  compilation  of  a  great  quantity 
of  statistics.  All  this  has  been  done  with  no  serious  attempt 
to  reform  the  antiquated  expensive  methods  prevailing  in  all 
departments  of  the  government. 

"The  people  have  been  so  intent  on  placing  the  corporations 
under  governmental  control  that  they  have  overlooked  the  ad- 
ditional burden  they  are  putting  on  their  own  shoulders  by 
placing  this  work  in  the  hands  of  officials  who,  handicapped  by 
bad  metluKls,  are  rendered  powerless  to  do  little  more  than  swell 
the  payrolls. 

"It  got's  without  saying  that  predatory  corporations  either 
should  be  brought  within  the  law  or  put  out  of  business.  It  is 
doubtless  true  that  salutary  laws  have  been  passed  regulating 
other  corporations,  but  we  should  also  apply  ourselves,  as  a 
eonditinn  precedent  to  the  government's  further  controlling  and 
managing  these  corporations,  to  reforming  the  administration 
of  the  governmont.  Otherwise  the  burdens  of  taxation  will  be- 
come iinbearable,  intolerable,  and  in  the  reaction  which  will 
surely  follow,  much  of  the  good  of  the  progressive  legislation  of 
reeent  years  will  be  undone." 

The  great  majority  of  the  44,000  laws  referred  to  will  un- 
doubtedly be  dead  letters  in  a  short  time,  if  they  ever  have  any 
efTect.     As  dead  letters  they  only  serve  to  clog  the  administra- 


INTRODUCTION  xvii 

tion  of  justice  and  encourage  disrespect  for  the  law.  Any 
one  of  them,  however,  may  be  utilized  at  any  moment  as  a  means 
of  creatino:  confusion  and  for  political  effect,  as  has  been  the 
case  with  the  Sherman  law. 

To  such  conditions,  to  inefficiency  in  office,  to  corruption,  to 
graft,  to  neglect  of  the  preservation  of  natural  resources,  to  fail- 
ure to  encourage  industry  and  agriculture,  to  the  throttling  of 
business,  to  utter  disregard  of  public  welfare  we  have  been 
brought  by  our  statesmen  in  their  wisdom. 

What  it  all  means  in  dollars  and  cents  alone  may  be  computed, 
but  what  it  means  in  unrest,  distress,  discouragement  and  misery 
is  beyond  any  human  calculation. 

The  principal  items  in  the  indictment  of  inefficiency,  costs 
which  could  not  be  charged  against  an  efficient  government, 
quickly  total  an  appalling  figure,  a  figure  which  concerns  vitally 
not  alone  every  citizen  of  the  country,  but  the  world  at  large, 
for  the  prosperity  of  all  civilized  nations  is  vitally  connected. 

"We  waste  $50,000,000  and  sacrifice  fifty  lives  a  year  in  forest 
fires,  and  have  been  doing  it  for  over  a  generation,  while  in  some 
years  the  loss  amounts  to  $200,000,000  in  money.  In  addition 
the  young  gro\\i;h  destroyed  by  fire  is  far  more  valuable  than 
the  merchantable  timber  burned. 

"We  waste  a  billion  cubic  feet  of  natural  gas  daily,  the  most 
perfect  of  fuels;  enough  to  supply  every  city  of  over  100,000 
population  in  the  United  States. 

We  waste  $22,000,000  a  year  in  the  manufacture  of  coke  in 
lost  gases;  540,000  tons  of  ammonium  sulphate  of  similar  value 
and  nearly  400,000,000  gallons  of  tar  worth  $9,000,000,  a  total 
with  other  wasted  by-products  of  $55,000,000. 

We  waste  a  vast  sum  yearly  in  not  utilizing  our  deposits  of 
peat  as  fuel.  The  value  of  available  peat  beds  is  estimated  at 
thirty-nine  thousand  millions  of  dollars. 

We  waste  30,000,000  horsepower  every  year,  by  failure  to 
utilize  our  water  power.  At  $20  per  horse  power  per  annnum, 
which  is  below  the  average  price,  being  less  than  one  cent  per 
horse  power  per  hour,  this  waste  amounts  to  $600,000,000.  This 
is  far  in  excess  of  the  value  of  all  coal  used  annually,  and  if  this 
power  were  utilized,  coal  could  be  conserved  for  future  uses,  for 
heating  and  purposes  where  the  power  would  not  be  serviceable. 

We  waste  $238,000,000  in  losses  through  floods  and  freshets. 
The  most  of  this  could  be  prevented  by  proper  engineering  in 
the  erection  of  levees  and  dams. 


'^viii  INTRODUCTION 

We  waste  $500,000,000  a  year  in  soil  erosion.  Through  the 
neglect  of  farmers  to  properly  work  their  land  and  to  prevent 
the  formation  of  gullies,  the  fertility  of  the  soil  is  washed  into 
the  lowlands  and  seas. 

We  waste  vast  land  resources  by  failure  to  drain  swamps  and 
overflowed  areas.  These  lands  could  be  reclaimed  at  small  ex- 
pense, increasing  the  value  of  the  land  three  fold,  and  supplying 
homes  for  10.000,000  people. 

We  waste  $659,000,000  a  year  through  losses  to  growing  crops, 
fruit  trees,  grain  in  storage,  etc.,  by  noxious  insects,  whose  multi- 
plication is  largely  due  to  careless  methods  of  agriculture. 

We  waste  $267,000,000  a  year  through  the  attacks  of  flies, 
ticks,  and  other  insects  on  animal  life.  A  greater  loss  is  caused 
by  the  enormous  sacrifice  of  human  life  due  to  mosquitoes,  flies, 
fleas,  and  other  germ  carrying  insects. 

We  waste  $100,000,000  annually  in  losses  to  live  stock  and 
crops  by  wolves,  rats,  mice  and  other  depredatory  mammals. 

We  waste  $93,000,000  a  year  in  losses  of  live  stock  due  to  dis- 
ease, of  which  $40,000,000  is  chargeable  to  Texas  fever,  while 
tuberculosis,  scabbies  and  cholera  are  next  in  importance,  all  of 
which  are  largely  preventable  if  not  eradicable. 

We  waste  $772,000,000  annually  in  losses  of  income,  due  to 
industrial  diseases;  that  is  diseases  which  attack  workers  on 
account  of  the  nature  of  their  employment  and  the  unsanitary 
conditions  in  which  the  work  is  carried  on. 

We  waste  $1,500,000,000  a  year  through  loss  of  life  and  illness 
to  industrial  and  other  workers,  through  preventable  disease, 
accidents  and  carelessness.  The  truth  of  this  is  corroborated  by 
the  fact  that  the  expectation  of  life  in  Germany  is  ten  years 
longer  than  in  America. 

We  waste  $2,503,900  a  year,  in  the  form  of  1465  human  lives, 
(using  the  figure  $1700  as  the  economic  value  of  a  human  life, 
the  governmental  estimate  later  referred  to)  in  coal  mine  acci- 
dents, which  are  almost  wholly  preventable. 

We  waste  10,585  lives  and  the  cost  of  169,538  injuries  in  rail- 
road accidents. 

We  waste  $300,000,000  annually  in  the  lax  administration  of 
the  government  itself.  This  is  equivalent  to  the  economic  value 
of  176,470  lives. 

We  waste  a  considerable  proportion  of  our  vast  pension  ex- 
penditures of  $173,000,000  due  to  fraudulent  and  undeserved 
pensions  granted.     The  cost  of  the  pension  armies  of  Germany, 


INTRODUCTION 


XIX 


France,  England  and  Austro-IIungary  is  less  than  $100,000,000. 

We  waste  $25,000,000  a  year  in  handling  the  mails,  while  the 
German  government  makes  a  net  profit  of  $28,000,000  on  a  much 
smaller  gross  business. 

The  foregoing  are  only  a  few  of  the  principal  items  in  the 
price  we  pay  for  the  inefficiency  of  our  federal  and  state  govern- 
ments, as  with  proper  administrative  efforts,  an  enormous  part 
of  the  total  would  be  saved.  There  are  in  addition  countless 
important  items  of  loss,  which  cannot  be  definitely  ascertained, 
as  many  unknown  factors  enter  into  them,  though  the  losses  are 
no  less  because  of  not  being  determinable  in  dollars  and  cents. 
The  foregoing  figures  are  the  result  of  careful  and  frequently 
repeated  estimates  by  conservative  governmental  experts,  and 
are  in  each  case  in  accord  with  the  observations  of  intelligent 
farmers  and  other  interested  persons  acquainted  with  conditions. 

Nor  do  these  items  aggregate  the  principal  part  of  the  losses 
of  inefficiency.  In  other  branches  of  activity  over  which  the 
federal  and  state  governments  have  no  control,  the  losses  are 
even  greater. 

We  waste  $250,000,000  annually  in  fire  losses  to  buildings  and 

other  structures. 

We  waste  $400,000,000  a  year  in  the  expense  of  the  portion  of 
city  water  supply  used  for  fire  fighting,  in  fire  department 
charges  and  in  distribution  charges,  all  of  which  makes  the  loss 
per  capita  in  this  country  ten  times  that  of  European  countries, 
showing  the  grossest  waste  and  inefficiency. 

We  waste  $650,000,000  annually  in  mismanagement  of  rail- 
roads, of  which  $300,000,000  is  due  to  personal  services,  $300,- 
000,000  in  fixed  charges  and  $150,000,000  in  supplies. 

We  waste  perhaps  a  greater  sum  in  private  manufacturing 
establishments.  AVhile  this  has  not  been  estimated  by  experts, 
yet  since  the  railroads  of  the  country  are  valued  at  eleven  thou- 
sand million  of  dollars,  while  the  value  of  manufactured  prod- 
ucts exceeds  seven  thousand  millions,  and  since  railroad  effici- 
ency is  10%  while  manufacturing  efficiency  is  but  60%,  the  loss 
in  manufacturing  is  probably  greater  than  in  railroad  ineffi- 
ciency. 

We  waste  in  the  careless  handling  of  eggs,  $40,000,000  a  year, 
largely  due  to  breakage  in  transportation.  Wliat  the  vast  waste 
of  careless  freight,  express  and  baggage  handling  amounts  to  in 
actual  damage,  besides  the  increased  cost  of  packing  to  guard 
against  it,  it  is  impossible  to  estimate. 


XX  INTRODUCTION 

We  waste  an  enormous  amount,  which  has  not  yet  been  made 
the  basis  of  a  comprehensive  examination,  in  losses  due  to  im- 
proper and  antiquated  methods  of  mining;  in  coal,  copper,  gold, 
silver  and  other  metals  and  in  metallurgical  processes  of  various 
kinds. 

We  waste  not  less  than  one  third  of  all  the  coal  used  for 
power  purposes  and  vastly  a  larger  proportion  in  heating 
through  failure  to  adopt  modern  machinery  and  methods. 

We  waste  $25,000,000  a  year  by  failure  to  adopt  the  potato 
drj'ing  process  used  in  Germany,  that  proportion  of  our  potato 
crop  rotting  unnecessarily. 

We  waste  $12,000,000  in  failure  to  utilize  the  leaves  of  potato 
and  other  plants,  a  source  of  profit  in  Germany  but  a  total  loss 
^^dth  us. 

AVe  waste  sums  which  though  immense,  are  not  capable  of  be- 
ing computed,  in  our  slowness  to  adopt  a  great  number  of  im- 
provements which  are  available  and  in  daily  use  in  Europe. 
Potato  drying  is  only  an  insignificant  example  of  this  waste. 

We  waste  $702,000,000  a  year  at  the  lowest  estimate  in  the 
failure  of  our  workmen  and  manufacturers  to  adopt  common 
sense  practice  in  daily  operations,  a  method  of  working  the  in- 
troduction of  which  is  being  greatly  hampered  by  being  called 
by  the  high  sounding  name  of  "scientific  management"  or 
''motion  study." 

We  waste  350  lives  and  the  cost  of  2700  accidents  in  trans- 
portation in  New  York  City  alone,  with  a  proportionate  loss  in 
other  cities  throughout  the  country.  These  losses  involve,  in 
addition,  great  expenditures  in  litigation,  the  total  of  which  is 
probably  not  less  than  $25,000,000  annually. 

What  we  waste  in  losses  through  inefficiency  of  administration 
in  cities  and  towns,  losses  due  to  crooked  and  ill-considered  con- 
tracts, and  the  great  wastes  of  graft  of  all  kinds  are  beyond  com- 
putation. 

These  figures,  although  startling,  are  only  a  part  of  tlie  stag- 
gering price  of  inefficiency.  A  multiplicity  of  additional  re- 
searches in  all  industries  would  be  necessary  to  ascertain  the 
entire  amount  of  waste. 

iMalcing  due  allowance  in  the  items  enumerated,  where  saving 
could  not  be  effected;  where  the  waste  though  great  may  be 
termed  unavoidable ;  the  total  remaining  constitutes  a  frightful 
indictment  of  American  extravagance,  waste  and  carelessness. 
It  amounts  to  more  than  ten  thousand  millions  of  dollars  an- 


INTRODUCTION 


XXI 


nually,  a  per  capita  loss,  assuming  the  smaller  figure,  with  our 
population,  of  not  less  than  $100.  For  the  33,000,000  wage- 
earners  of  the  country,  it  amounts  to  not  less  than  $300  per  year 
or  a  minumum  of  $5.75  per  week,  since  the  burden  is  concen- 
trated on  their  shoulders.  As  the  average  wage  of  wage-earners 
is  under  $10  a  week,  the  crushing  weight  of  inefficiency,  of  the 
venomous  graft  and  criminal  waste  which  pervades  our  national 
life  from  government  to  individual,  is  understood,  and  the  ne- 
cessity of  prompt,  thorough  and  vigorous  efforts  at  remedying 
conditions  is  appreciated. 

Among  the  principal  causes  of  these  conditions  is  the  fact  that 
everybody  is  looking  out  for  himself  too  much  and  too  ruth- 
lessly; seeking  with  too  much  energy  the  immediate  ''practical" 
advantage,  and  ignoring  the  fact  that  his  own  welfare  is  indis- 
solubly  bound  up  with  the  welfare  of  his  neighbor.  A  vicious 
circle  is  set  up  in  that  the  citizen  lacks  respect  for  the  employer 
and  the  government,  and  the  government  is  not  primarily  con- 
cerned with  the  welfare  of  the  citizen.  Everyone  is  working 
at  loggerheads  and  the  result  of  this  condition  is  seen  in  the 
establishment  of  trusts  and  their  consequent  train  of  evils, 
through  the  impossibility  of  the  business  man  surviving  in  the 
conditions  of  fierce  competition  which  ordinarily  prevail.  Had 
fair  competition  been  assured  by  law,  trusts  could  never  have 
overcome  the  independence  of  business  men  and  forced  them 
into  consolidations. 

In  seeking  remedies  for  the  conditions  which  have  been 
created,  it  is  the  part  of  wisdom  to  draw  comparisons  with  other 
countries  in  which  similar  conditions  have  been  met. 

Owing  to  certain  advantages  in  inherited  policy  and  charac- 
teristics, as  well  as  from  natural  causes,  one  of  the  countries 
which  has  solved  many  of  the  problems  which  are  obstacles  to 
general  prosperity  and  progress  in  America  to-day,  is  Germany ; 
and  in  considering  American  conditions,  many  comparisons  will 
be  made  with  German  conditions,  where  efficiency  has  reached 
the  highest  point  of  development  yet  achieved ;  since  the  author, 
being  of  German  birth  and  training,  is  familiar  with  those  con- 
ditions, as  well  as  with  American  conditions  through  citizenship 
and  an  active  participation  in  American  business  and  engineer- 
ing undertakings  during  the  past  ten  years. 

Of  the  great  benefits  that  are  to  be  derived  by  indi\'iduals 
as  well  as  countries,  from  the  study  of  conditions  in  other  coun- 
tries, there  can  be  no  doubt. 


5«ii  INTRODUCTION 

Mr.  Herman  Ridder,  the  eminent  editor,  in  the  American 
Travelers'  Edition  of  "Deutsehland,"  an  official  journal  for  the 
promotion  of  international  intercourse,  writes  under  the  title 
"The  United  States  and  Germany"  as  follows: 

"Any  move  which  tends  to  stimulate  international  intercourse 
is  conducive  to  universal  welfare.  For  upon  the  shaping  of  the 
relations  between  the  civilized  nations  of  the  earth,  depend  its 
future  destinies,  and  these  relations  are  seldom  strained,  but, 
almost  unexceptionally,  improved  by  mutual  acquaintance.  Let 
the  people — mind  you,  the  real  people,  and  not  the  fortuitous 
exponents  of  their  dispositions  or  customs  or  policies — the  peo- 
ple of  two  nations,  like  the  United  States  and  Germany,  once 
grow  to  understand  and  know  one  another  thoroughly,  and  they 
will  be  apt  to  rule  the  w^orld.  Not  as  allied  conquerors  by  the 
strength  of  arms,  but  as  joint  leaders  in  the  material  and  in- 
tellectual development  of  the  human  race.  Then  there  would  be 
no  need  of  a  formal  alliance  secured  by  convention  or  treaty, 
for  as  soon  as  either  nation  becomes  convinced  that  there  is  no 
elementary  antagonism  of  interests,  and  that,  on  the  contrary, 
their  interests  are  reciprocal,  a  co-operation  along  the  whole  line 
of  human  development  will  be  the  perfectly  natural  result.  This 
is,  in  the  case  of  Germany  and  the  United  States,  no  idle  vision 
of  a  desirable  future  status.  For  there  exists  between  the 
American  and  GeiTnan  peoples  a  closer  community  of  interests, 
a  truer  identity  of  national  endeavor  and  a  nearer  relationship 
of  national  consciousness  than  may  be  obvious  to  the  casual 
observer. 

"When  more  than  fifty  per  cent  of  the  population  of  the 
United  States  have  German  blood  in  them — a  fact  established 
by  the  Federal  census  returns — the  German  influence  upon  the 
forming  of  the  character  of  the  American  nation  cannot  be  ig- 
nored. True,  the  German  vein  current  within  the  national 
American  body  is  less  pretentious  than  those  inoculated  by  the 
Puritan,  or  the  Scot  or  the  Celt,  but  when  we  analyze  the  prod- 
uct of  the  mixture  and  weigh  its  component  values,  we  find 
some  of  its  best  qualities  traceable  to  German  origin :  Thorough- 
ness, endurance,  reliability  in  the  pursuit  of  live  tasks;  aspira- 
tions for  ideals;  artistic  sentiment  and  the  zest  for  mind  culture. 

"Many  of  the  great  inventions  which  have  in  the  last  century 
revolutionized  the  world,  have  rooted  in  German  inventive  spirit, 
while  American  pluck  and  enterprise  have  perfected  them.  On 
the  other  hand,  Americans  engaged  in  gigantic  financial,  com- 


INTRODUCTION  ""^ 

raereial  or  industrial  occupations  are  wont  to  look  to  Germany 
for  methods  to  give  them  economic  strength. 

"The  interdependence  of  the  two  nations  is  well  understood 
and  appreciated  by  all  thoughtful  and  instmcted  men.  With 
so  much  in  common  in  the  past  and  so  many  ties  in  the  present, 
an  earnest  collaboration  in  the  work  of  civilization,  education 
and  training, — to  quote  the  words  of  a  prominent  American — 
'Germany  and  America  may  well  move  forward  in  harmony, 
each  maintaining  all  its  independence  of  method  and  thought 
and  action,  yet  both  gaining  strength  from  a  better  understand- 
ing and  mutual  self-help  by  w^hich  each  may  supplement  the 
needs  of  the  other.'  " 

Germany  herself,  a  generation  ago,  was  an  inefficient  and  ex- 
hausted nation,  and  her  progress  and  prosperity  have  been  due 
principally  to  sound  statesmanship  and  the  recognition  the 
country  over  of  what  could  be  learned  from  other  countries. 

The  great  lessons  to  be  learned,  especially  from  America,  were 
appreciated,  and  this  policy  is  vigorously  continued.  German 
students  are  sent  the  world  over  and  return  home  with  new 
ideas  to  the  great  benefit  of  the  countr3^  For  example,  four- 
teen hundred  Germans  came  over  during  the  St.  Louis  exposition 
in  1904  to  study  American  methods,  customs  and  business,  to 
be  applied  to  German  conditions  wherever  an  advantage  could 
be  found  in  doing  so. 

The  enormous  strides  which  Germany  has  made  in  the  last 
twenty  years  have  served  to  place  her  in  a  position  of  leadership 
among  the  nations  of  the  world,  and  in  making  comparisons  of 
efficiency  it  will  be  necessary  to  draw  a  picture  by  no  means 
favorable  to  other  countries,  especially  our  own,  not  so  much  on 
account  of  their  lack  of  progress  as  on  account  of  their  failure 
to  progress  at  the  rapid  rate  which  Germany  has  maintained. 

Frequent  references  to  German  accomplishments  -wall  thus 
throughout  be  necessary  even  to  the  point  of  over  iteration,  but 
they  will  be  necessary  in  order  to  furnish  a  basis  of  comparison ; 
for  efficiency  is  not  an  absolute  quality,  but  rather  one  that  is 
always  relative  and  therefore  one  which  must  employ  the  most 
efficient  unit  as  the  basis  of  comparison. 

As  has  been  pointed  out  by  prominent  English  statesmen  in 
criticizing  Germany,  the  German  mind  is  of  a  certain  robust 
quality  that  thrives  on  criticism  and  consequently  the  Germans 
are  preferably  engaged  in  energetic  criticism  of  each  other  rather 
than  in  criticism  of  outsiders.     A  criticism  that  is  well  taken  is 


=^^iv  INTRODUCTION 

consequently  regarded  as  an  asset  rather  than  an  affront  as  it 
points  out  a  possible  place  where  improvement  may  be  made. 
Thus  every  knock  may  be  regarded  as  a  boost.  The  tone  of  the 
present  work  in  its  freedom  of  criticism  is  not,  therefore,  other 
than  of  the  most  friendly  character,  and  if  it  succeeds  in  indicat- 
ing only  one  point  at  which  improvement  may  be  effected,  it 
will  certainly  have  justified  itself  in  every  respect  by  the  value 
which  vsdll  accrue  in  the  effecting  of  such  improvements. 

The  enormous  progress  of  Japan  has  been  due  to  following  the 
example  of  Germany,  and  the  Japanese  found  their  most  valu- 
able lessons  in  Germany,  where  the  experience  of  the  world  had 
been  accumulated.  i 

To-day  Argentina  and  China  are  carrying  out  the  same  policy, 
while  even  England  is  waking  up.  The  movement  in  America 
to  take  advantage  of  foreign  conditions,  though  slow,  is  of  con- 
siderable extent.  It  must  necessarily,  however,  be  carried  out 
on  a  more  elaborate  and  vigorous  scale,  and  a  thorough  reorgani- 
zation of  internal  conditions  effected,  if  we  expect  to  keep 
abreast  of  the  times. 


THE  PRICE  OF  INEFFICIENCY 


THE  PRICE  OF  INEFFICIENCY 


CHAPTER  I 
THE  SITUATION 

National  unrest — Falae  conception  of  public  duty — Public  indifference 
to  official  neglect — Bismark's  remedy — Its  stimulation  of  German 
progress — Political  isolation  of  the  United  States — Neglect  of  the 
value  of  the  experience  of  other  countries — The  duty  of  Americans 
to  America — Monopoly  and  progress  in  Germany — Co-operative  na- 
tionalism— Fundamental  alteration  of  the  attitude  of  the  state 
towards  the  individual. 

The  causes  of  the  unrest  which  is  the  dominant  motive  in 
American  life  to-day;  of  the  social  unrest,  economic  unrest  and 
the  unrest  of  the  losing  struggle  for  existence;  and  the  question 
of  remedies,  if  they  are  to  be  found,  is  forcing  itself  to  the  atten- 
tion of  everyone ;  artisans  and  students,  farmers  and  professors, 
laborers  and  corporation  managers  alike.  It  is  the  principal 
problem  of  government  itself. 

The  question  is  continually  arising;  is  this  a  government  of 
the  people  for  the  people  by  the  people,  or  is  it  a  government 
of  the  indifferent  and  uninformed  for  and  by  the  incompetent 
and  venal? 

The  dissatisfaction  of  the  public  extends  from  municipal  gov- 
ernment and  local  business  affairs  to  the  management  of  the 
great  trusts  and  the  conduct  of  congress. 

The  distrust  so  evident  is  founded  on  the  belief  that  public 
officers  and  the  managers  of  the  great  corporations,  who  are  also, 
in  effect,  public  servants,  have  not  as  a  class  sought  the  truth 
with  a  determination  to  act  upon  it  for  the  public  welfare,  but 
have  avoided  the  broad  road  of  public  service  for  the  by-paths  of 
personal  profit. 

The  true  relation  between  the  public  and  those  in  high  position 
has  been  misunderstood  nowhere  as  in  America.  Although  the 
phrase,  **the  servants  of  the  public,"  is  current  freely  enough, 


4  THE  PRICE  OF  INEFFICIENCY 

it  is  of  little  force  and  effect.  Former  Mayor  McClellan  of  New 
York,  while  in  office,  on  being  asked  the  name  of  his  employer, 
by  an  itinerant  statistician  filling  a  blank  for  some  now  forgotten 
purpose,  pointed  to  the  city  directory  as  a  list  of  his  employers. 
Yet  true  as  this  was,  no  citizen  there  listed,  nor  the  mayor  him- 
self, would  feel  that  their  relationship  as  employer  and  employee 
was  more  than  one  theoretically  so.  Yet  this  mistaking  of  the 
substance  for  the  shadow  is  one  of  the  real  causes  of  present 
conditions,  as  will  be  presently  pointed  out. 

The  feeling  is  that  the  public  official  has  been  elevated  to  a 
great  dignity,  where  he  must  trouble  himself — and  does — but 
little  as  to  the  welfare  of  his  employers. 

The  lack  of  virility  in  the  attitude  of  the  public  towards 
its  public  servants  causes  the  public  to  be  poorly  served,  and 
w^hile  the  individual  may  realize  that  his  best  interests  are  be- 
ing neglected  by  the  men  he  has  elected  and  is  paying  to  serve 
him,  he  yet  takes  no  steps  to  improve  matters. 

He  knows  that  wrong  is  being  done;  he  is  a  victim  and  an 
accessory  as  well,  yet  his  conscience  is  not  aroused.  The  con- 
science of  the  public  is  asleep  in  fact,  and  while  we  feel  things, 
as  individuals,  we  do  not  feel  things  as  part  of  an  effective  pub- 
lic sentiment. 

Yet  we  are  moral  people.  We  uphold  right  and  condemn 
wrong,  but  the  voice  of  effective  remonstrance  has  remained 
silent. 

Only  now,  when  the  neglect  of  the  public  servants,  whether 
governmental  or  corporation,  has  led  to  acute  conditions,  is  the 
public  rolling  over  in  its  sleep. 

The  whole  country  is  in  a  condition,  such  as  a  business  man's 
business  would  be,  if  he  spent  his  working  hours  attending  to 
something  else. 

To  obtain  from  public  servants  the  proper  discharge  of  their 
duties,  it  is  necessary  to  subject  them  to  criticism.  In  the  words 
of  Bismarck,  who  said  when  in  power : 

"If  the  public  would  get  what  it  wants,  it  must  attack  the 
administration. ' ' 

To  the  almost  passionate  acceptance  and  following  of  this 
advice  of  Bismarck's,  by  the  Germans,  close  observers  ascribe 
much  of  Germany 's  present  prestige  as  the  leader  of  the  progress 
of  the  world. 

That  a  public  official  in  Germany  is  a  public  servant  to  be 


THE  SITUATION  5 

promptly  criticized  by  the  individual,  a  criticism,  too,  which 
those  in  authority  act  upon,  is  a  well  recognized  fact.  There 
the  criticism  of  an  official  may  cause  him  to  quickly  find  himself 
merely  a  member  of  the  general  public  again;  whereas  in  Amer- 
ica the  complaint  would  reach  a  pigeon  hole  and  the  citizen  be 
patronized  as  a  crank,  if  not  properly  placed  in  an  asylum. 

The  methods  whereby  the  public  may  in  this  country  attack 
the  government  in  the  meaning  of  Bismarck's  phrase,  are  ex- 
tremely complicated  and  ineffective.  An  opinion  can  only  be 
had  every  second  and  fourth  year,  and  at  such  times  only  be- 
tween one  of  two  groups  of  alternatives,  so  that  in  objecting  to 
one  set  of  officials  known  as  a  party  and  in  turning  them  out, 
the  set  to  go  in  while  approved  in  the  main  issue  cannot  be  pre- 
vented from  carrying  in  with  them  many  subsidiary  evils  which 
are  not  approved.  A  new  four  years  of  experiment  must  be 
gone  through  with,  only  to  be  duplicated  again  after  another 
election.  An  administrative  personnel  of  412,000  officials  must 
be  changed,  which  only  includes  the  federal  governmental  body, 
and  the  whole  machinery  of  administration  disorganized,  while 
these  amateurs  are  learning  a  new  trade,  the  tools  of  which  they 
must  soon  lay  down  again. 

In  solving  the  problem  arising  out  of  its  own  neglect,  the  pub- 
lic must  find  out  first,  the  causes,  and  then  apply  the  remedies. 
"What  the  causes  have  been  and  what  the  remedies  are  to  be, 
must  deeply  engage  the  attention  of  everyone  who  has  either 
his  own  interests  or  those  of  his  country  at  heart. 

And  in  reaching  conclusions,  the  experience  of  other  countries 
will  supply  valuable  lessons.  The  spread-eagleism  of  the  past 
is  disappearing;  America  is  a  country  among  countries,  not  a 
paradise  among  deserts,  and  the  criticism  of  thoughtful  for- 
eigners on  American  conditions  can  only  be  welcome. 

An  Englishman,  the  Rev.  Herbert  W.  Horwill,  in  the  National 
Review  of  London,  v^rrites  cogently: 

"The  necessity  of  making  acquaintance  with  what  is  happen- 
ing elsewhere  in  the  world  has  been  minimized  for  Americans, 
until  lately,  by  the  political  isolation  of  the  United  States.  That 
country  has  been  spared,  not  only  the  entanglement  of  foreign 
alliances,  but  also  the  educating  influence  of  direct  contact  with 
foreign  problems.  Its  freedom  from  European  complications, 
however  helpful  on  the  whole  to  the  development  of  its  internal 
resources,  has  certainly  tended  to  circumscribe  the  ideas  of  its 
people.    Farther,  in  the  Old  "World,  even  if  we  are  not  able  to 


6  THE  PRICE  OF  INEFFICIENCY 

go  abroad,  a  constant  appeal  is  made  to  the  imagination  by 
visible  memorials  of  past  centuries.  We  can  travel  in  time,  if 
not  in  space.  "We  have  before  our  eyes,  persistent  reminders 
that  the  civilization  of  the  twentieth  century  is  not  the  sudden 
creation  of  our  own  contemporaries,  or  of  a  generation  immedi- 
ately preceding,  but  has  been  slowly  built  up  by  the  genius  and 
toil  of  our  forefathers." 

To  consider  how  other  countries  are  meeting  their  problems, 
and  to  adapt  to  the  uses  of  America  and  to  our  conditions  those 
of  their  expedients  and  policies  which  have  proved  most  suc- 
cessful, and  to  learn  from  their  failures  lessons  of  value,  is  the 
duty  of  Americans  to  America. 

Among  the  states  which  in  modern  times  have  shown  the 
greatest  energy  and  resourcefulness  is  Germany,  and  the 
methods  of  Germany  in  dealing  with  similar  problems  will  be 
considered  from  time  to  time  in  greater  detail,  being  of  the 
first  importance,  since  Germany  has  made  greater  advances  than 
any  other  country  in  many  respects,  under,  perhaps,  the  impetus 
of  greater  necessity,  new  nationality  and  a  dominant  patriotism. 

German  aims,  policies  and  conditions  are  well  summarized  in 
an  article,  "Monopoly  and  Progress,"  by  Dr.  Franz  Erich  Junge- 
Hermsdorff,  a  German  consulting  engineer  and  Doctor  of  Philos- 
ophy, who  resided  in  the  United  States  for  a  number  of  years 
and  made  a  study  of  conditions  here  in  the  Engineering  Maga- 
zine of  March,  1911,  of  which  he  states  in  part: 

"Nothing  common  to  man  is  foreign  to  nations.  The  story 
of  the  prodigal  son  applies  to  families  as  well  as  to  communities. 
Thus  in  every  people  there  is  a  natural  inclination  to  prodigality, 
but  not  every^  nation  has  a  benevolent  father  ready  to  kill  a 
fatted  calf,  if  waste  and  destruction  have  depleted  its  natural 
inheritance.  Germany  is  not  a  rich  man's  heiress.  She  must 
prepare  her  children  for  adversity,  not  for  prosperity,  must  fit 
them  to  the  lean  years  which  are  near,  not  for  the  fat  years  that 
are  promised  in  the  future.  Thus  and  thus  only  will  they  be 
able  to  conquer  the  racking  times  which  are  approaching. 

* '  Hence,  to  the  prime  rule  of  stragetic  expediency  dominating 
our  national  household  is  coupled  the  other  no  less  important 
consideration  of  national  economy,  urging  upon  authorities  the 
supreme  duty  of  guarding  the  country 's  irreplaceable  resources, 
material  and  other,  which  joined  with  the  subtle  factor  of  civic 
virtue  are  the  pillars  of  every  commonwealth.  Having  to  support 
sixty-five  million  active  people  on  a  territory  four-fifths  the  size 


THE  SITUATION  7 

of  Texas,  and  being  fully  aware  of  our  geographic  limitations, 
of  the  precariousness  of  our  central  situation,  of  the  scarcity  of 
raw  materials  at  our  avail,  of  our  dependence  for  certain  sup- 
plies on  foreign  markets,  and  of  the  fact  that  in  times  of  war 
they  will  be  cut  off  by  our  adversaries — scientific  administration 
and  rational  utilization  of  materials,  emancipation  from  foreign 
support,  the  development  of  high  grade  industries  and  agricul- 
ture,  and  the  exchange  of  gray  matter  for  raw  matter,   are 
natural  correctives  of  our  limited  opportunities  and  logical  di- 
rectives for  the  industrial  and  commercial  policy  of  the  Empire. 
"Leaving  aside  the  political  argument  and  speaking  more  par- 
ticularly of  the  attitude  of  the  state,  the  present  policy  of  Ger- 
many can  be  shortly  defined  as  one  of  mutual  partnership  or  co- 
operative nationalism;  that  state  and  its  government  attending 
to  the  more  general  and  ideal,  and  the  private  individual  to  the 
more  special  and  material  ends  of  the  national  business.     In  spite 
of  democracy  pressing  from  without  and  of  evolutionary  philos- 
ophy pressing  from  within,  there  is  a  growing  tendency  on  the 
part  of  the  masses  to  rely  on  the  state  for  support  and  inspira- 
tion, making  the  national  government  both  co-active  and  co-re- 
sponsible   for    their    welfare.     And,    even    among    conservative 
statesmen,  the  leaning  to-day  is  far  more  in  the  direction  of 
state  socialism  than  in  the  direction  of  democracy. 

' '  This  leaning  on  the  paternal  state  is  not  wholly  the  result  of 
modern  tendencies.     It  is  a  result,  in  part,  of  the  traditional 
policy  of  the  Hohenzollern,  radiating  from  Prussia  ever  since 
they  took  over  the  control  of  the  affairs  of  that  country.     It  was 
the  proud  boast  of  Frederick  the  Great  that  he  was  le  roi  des 
guex.     Of  all  the  governments  of  the  seventeenth  century,  the 
Prussian  was  the  first  to  seek  the  welfare  of  the  whole  commu- 
nity.    The  "Landrecht"  recognized  the  state  as  the  protector  of 
the  poorer  classes,  and  the  supply  of  sustenance  and  work  for 
those  lacking  means  and  opportunity  of  earning  a  livelihood  as 
one  of  its  duties.     It  was  upon  these  clauses  that  Bismarck  re- 
lied when,  on  I\Iay  7th,  1884,  he  declared  to  the  Reichstag  his 
recognition  of  the  laborer's  right  to  work.     His  idea  of  social 
reform,  of  the  nationalization  of  railways,  of  state  monopolies 
in  brandy  and  tobacco    (not  realized),   even  of  the  return  to 
protection,  all  spring  from  his  profound  conviction  that  "many 
measures  which  we  have  adopted  to  the  great  blessing  of  the 
countrj^  are  socialistic,  and  the  state  will  have  to  accustom  itself 
to  a  little  more  socialism  yet."     (1882). 


8  THE  PRICE  OF  INEFFICIENCY 

*'In  this  age  of  monopoly  when,  under  the  sway  of  commer- 
cialism, the  empire  of  business  in  all  countries  is  encroaching 
upon  national  governments,  anxious  to  seize  their  privileges 
without  burdening  itself  with  their  responsibilities,  the  blessing 
of  a  paternal  policy  for  the  weal  of  the  state  is  making  itself 
especially  felt.  In  reflecting  upon  American  conditions,  in  this 
relation,  it  should  be  borne  in  mind— as  distinguishing  between 
our  respective  constitutional  confederate  systems — that  in  Ger- 
many every  one  of  the  twenty-six  states  is  really  a  sovereign 
agency  rendering  public  service,  not  merely  a  government  or 
administrative  district. 

"In  Germany  private  monopoly  could  never  reach  such  gi- 
gantic proportions,  because  at  the  very  outset  of  the  industrial 
age  a  big  slice  of  the  national  assets  was  withdrawn  from  private 
enterprise  by  the  government,  being  reserved  exclusively  for 
public  uses  and  operated  on  a  strictly  socialistic  basis  for  the 
equitable  good  of  all.  The  other  major  portion  of  the  basic  re- 
source was,  of  course,  left  to  exploitation  and  improvement  by 
private  initiative.  In  the  course  of  time  and  under  the  influence 
of  the  economic  revolutions  in  the  neighboring  European  coun- 
tries, especially  England  (Smith)  and  France  (Colbert),  the 
attitude  of  the  state  towards  industry  has,  naturally,  under- 
gone various  changes.  But  to-day  the  general  tendency,  under 
the  pressure  of  the  socialistic  vote,  is  stronger  than  ever  before 
for  an  expansion  of  national  co-operation  under  the  leadership 
of  state  or  national  government— representing  a  compromise,  as 
it  were,  between  the  mereantilistic  and  the  physiocratic  doc- 
trines, between  the  individualist  and  collectivist  schemes— an 
attempt  to  infuse  the  cold  reasoning  of  reckless  commercialism 
and  the  Utopian  dreams  of  extreme  socialism  with  the  nobler 
motives  of  national  expediency, 

"While  the  authority  of  the  state  is  invariably  supreme,  its 
functions  are  of  the  progressive  variety,  establisliing  the  balance 
between  all  the  productive  and  destructive  forces  of  the  land. 
The  state  not  only  partakes  in  every  form  of  private  industry, 
engaging  in  part  of  the  three  factors  of  production— nature, 
labor'and  capital,— but  it  extends  its  intervention  in  proportion 
to  the  growing  needs  of  the  commonwonlth.  Its  functions  of 
service  are  quite  as  marked  as  its  f  unci  ions  of  restraint,  and, 
with  the  standard  of  German  citizenship  on  the  ascendant,  there 
is,  indeed,  a  tendency  of  diminishing  restraint  and  of  increasing 
service. ' ' 


CHAPTER  II 
OUR  POLITICAL   SYSTEM 

The  "servants"  of  the  public — ^Are  they  underpaid? — What  is  the  matter 
with  our  state  legislatures  ? — Laws — Their  supply  and  demand — 
Poor  quality  of  laws  made  by  our  legislators — When  private  inter- 
ests pay  the  law-makers,  who  do  they  work  for? — "Practical"  men 
in  office — A  national  canker — German  administrative  processes — 
Effectiveness  of  the  bureaucracy — Why  it  succeeds — The  constitution 
of  the  United  States  as  a  governmental  system — How  it  automatically 
collects  inferior  congressman — Does  it  place  a  premium  on  demagogue- 
ism? — How  the  constitution  keeps  the  greatest  men  out  of  the  presi- 
dency— The  Catholic,  the  Jew  and  the  Atheist — Conventions  as  extra- 
constitutional  growths — How  the  "slate"  originates — The  roots  of 
graft — The  origin  of  "pull" — Bosses  and  blackmailing  laws — Every 
voter  with  a  private  interest  opposed  to  public  policy — Automatic 
opposition  to  good  government — Log  rolling — ^The  constitution  as  an 
instrument  for  favoring  self  interest  as  opposed  to  the  general  wel- 
fare— Back  yard  patriotism — Confusion  of  differing  state  laws — 
Great  waste  of  deciding  the  constitutionality  of  laws — National  con- 
tempt for  law. 

That  the  public  is  poorly  served  by  its  servants;  its  officials, 
employees  and  managers  of  vast  corporations  charged  with  a 
public  interest,  is  well  understood. 

The  reason  why  is  not  so  clear. 

In  the  case  of  the  great  corporations,  the  fact  that  they  are 
new,  and  their  true  relation  to  the  public  not  yet  understood, 
serves  as  an  excuse,  but  for  our  public  officials,  they  were  graft- 
ing long  before  grafting  was  a  word  in  its  present  meaning. 
They  have,  in  fact,  been  serving  their  employers  unfaithfully  for 
generations. 

Perhaps  the  principal  reason  why  the  public  is  so  poorly 
served,  is  that  it  pays  its  servants  starvation  wages,  compared 
with  what  the  talent  demanded  can  obtain  for  an  equal  service 
rendered  to  a  private  employer. 

The  greatest  sources  of  governmental  inefficiency  are  the  legis- 
latures of  the  several  states.  The  salaries  paid  are  eked  out 
by  graft  and  near  graft,  by  laws  favoring  blackmailing  schemes 
and  laws  favoring  interests  contrary  to  the  public  welfare, 

9 


10  THE  PRICE  OF  INEFFICIENCY 

If  the  salaries  of  the  legislators  of  New  York  state,  for  ex- 
ample, were  increased  to  $15,000  a  year,  instead  of  remaining  at 
$1500,  the  state  would  be  out  of  pocket  immediately  some 
$3,015,000,  and  this  might  seem  an  extravagance.  But  consider 
the  effect  of  an  annual  salary  of  $15,000.  It  would  attract  a 
vastly  better  class  of  men  to  office.  The  present  low  grade  ward 
politicians  could  not  secure  election,  since  brighter  men  would 
be  after  the  prizes.  Instead  of  incompetents,  the  legislature 
would  be  filled  with  competents;  with  men  better  able  to  reach 
proper  decisions,  and  men  able  to  see  that  the  continuation  in 
the  lucrative  offices,  held,  would  depend  on  how  well  they  could 
demonstrate  to  the  public  their  fitness. 

Considering  the  vast  outlays  authorized  by  legislators,  the 
mere  exercise  of  bad  judgment  in  a  single  instance  by  a  legisla- 
ture would  and  does  constantly  cost  the  state  more  than  the 
increased  salaries  of  the  legislators  would  amount  to. 

Without  any  question  of  graft  or  dishonesty,  it  is  the  part  of 
wisdom  to  pay  the  highest  possible  price  for  legislative  services, 
merely  for  the  sake  of  efficiency,  while  morally,  it  is  certainly 
better  for  the  state  to  pay  the  price  of  legislation  and  get  it, 
rather  than  to  allow  private  interests  to  pay  the  price,  as  at 
present,  and  get  it. 

Aside,  however,  from  the  question  of  being  poorly  paid,  there 
is  a  disconcerting  lack  of  honesty  among  the  servants  of  the  pub- 
lic; a  sort  of  a  "take  it  while  you  can  get  it"  attitude,  as  though 
an  election  to  office  were  a  license  to  plunder. 

Why  should  this  be  so? 

Why  should  the  elected  official  be  prone  to  graft  and  deals? 
In  a  country  whose  principal  boasts  are  of  liberty  and  patriot- 
ism, why  such  a  general  disregard  of  the  rights  of  the  public  as 
a  whole,  why  so  many  "practical"  men  in  office? 

So  inured,  however,  are  Americans  to  the  dereliction  of  pub- 
lic officials,  that  to  ask  why  a  public  official  should  not  be  honest, 
is  likely  to  be  regarded  as  a  naive  stroke  of  liumor.  The  contrary 
is  so  usual  that  it  has  become  almost  a  matter  of  course. 

But  as  a  novel  point  of  view,  why  not  demand  honesty  of  the 
elected  official,  and  demand  it  seriously? 

The  effects  of  official  dishonesty  are  widespread  and  enor- 
mously destructive,  and  while  the  importance  of  honest  legisla- 
tion cannot  be  over-estimated,  the  dishonest  article  continues 
in  evidence.     Why  is  it? 

Some  canker  finally  kills  every  nation.     Is  the  canker  that 


OUR  POLITICAL  SYSTEM  11 

will  end  American  liberty,  in  early  evidence  now,  in  the  bad 
faith  of  legislators?  Can  it  be  chopped  out  and  a  new  groAvth 
stimulated,  or  is  it  characteristic  of  the  whole  tree?  Such  lack 
of  patriotism  in  a  free  country  is  surprising  to  the  foreigner. 
In  Germany,  for  example,  such  conditions  do  not  exist.  That, 
at  any  rate,  is  not  the  German  canker. 

Office  is  held  in  Germany,  mainly  by  the  bureaucratic  class. 

They  serve  for  a  reasonable  compensation,  but  render  a  high 
grade  of  service.  Their  motive  is  patriotism,  the  honor  of  serv- 
ing their  country.  They  would  no  more  think  of  grafting  than 
a  private  soldier  in  the  army  of  Grant  or  Sherman  would  have 
thought  of  putting  his  hand  in  his  general's  pocket  and  taking 
his  watch  or  money. 

The  success  of  this  system  of  administration  depends  on  the 
moral  and  intellectual  qualities  of  the  individuals  composing 
the  government.  It  stands  and  falls  with  decent  officialism. 
If  corruption  and  commercialism  ever  claim  the  bureaucracy, 
if  public  servants  place  gain  above  honor,  the  whole  system 
will  become  rotten. 

But  against  this  possibility  is  the  fact  that  honesty  in  the 
public  service  is  held  in  high  esteem  by  public  sentiment,  and 
this  pronounced  and  appreciative  endorsement  of  official  integ- 
rity, as  much  perhaps  as  the  quality  of  the  personnel  itself,  calls 
forth  and  keeps  uncontaminated  the  highest  qualities  in  the 
official. 

Although  highly  extolled,  and  rightly  so,  as  the  bulwark  of 
liberty,  the  constitution  of  the  United  States  is  far  from  being 
a  perfect  political  instrument.  The  system  of  requiring  the  res- 
idence in  the  congressional  district  of  its  representative  in 
congress,  has  the  effect  of  collecting  at  Washington  biennially 
a  large  number  of  inexperienced  and  incompetent  legislators, 
often  persons  of  the  smallest  capacity,  who  look  upon  their  term 
of  office  as  a  temporary  adornment,  and  who  have  no  thought 
of  making  law-making  a  seriously  considered  business,  nor  any 
capacity  whatever  for  the  making  of  laws. 

The  United  States  thus  has  its  laws  made  largely  by  the  tyros 
who  happen  to  be  in  office.  An  experienced,  capable  and  bril- 
liant public  man  is  likely  to  be  retired  at  any  moment  through 
a  change  of  political  sentiment  in  his  district,  and  thus  there  is 
no  incentive  to  a  systematic  study  of  government  on  the  part 
of  those  who  govern. 

The  system  has  the  effect  of  producing,  and  placing  a  high 


12  THE  PKICE  OF  INEFFICIENCY 

premium  upon  men  who  have  the  ability  to  get  elected,  regard- 
less of  their  ability  to  make  laws.  The  careful  and  painstak- 
ing legislator,  of  judicial  mind  and  broad  views,  whose  services 
the  country  should  have  in  the  making  of  laws,  gives  place  to 
the  blatant  demagogue  who  can  influence  a  crowd ;  for  the  real 
law-maker  and  statesmen  is  not  likely  to  be  the  man  to  arouse 
the  passion  and  prejudice  which  go  to  decide  the  issue  of  an 
American  election. 

It  is  undoubtedly  true  that  only  accidentally  does  a  really 
great  man  become  president  of  the  United  States.  Our  presi- 
dents are  more  than  likely  to  be  neutral  persons.  Too  often  a 
president  is  the  resultant  of  forces  of  which  he  is  not  one;  a 
person  crafty  enough  to  float  with  the  tide  and  conventional 
enough  to  be  in  harmony  with  the  intensely  conventional  views 
of  the  electorate;  that  is  to  say,  a  man  in  whose  armor  the 
demagogues  of  the  other  side  can  find  no  opening. 

No  Catholic  can  become  president  of  the  United  States,  no 
Jew,  no  atheist,  no  Southerner  and  no  philosopher  however 
great;  not  because  they  could  not  be  elected,  but  because  they 
could  not  be  nominated  for  office  by  any  great  party  for  fear  of^ 
the  demagogues  of  the  other. 

In  the  nominating  of  candidates  for  office,  a  system  entirely 
extra-constitutional;  a  system  that  begins  before  the  constitu- 
tion begins  and  which  the  authors  of  that  instrument  never 
dreamed  of,  has  evolved  itself,  greatly  to  the  shame  and  dis- 
credit of  republican  institutions;  and  a  horde  of  persons  known 
as  bosses  has  come  into  being ;  a  boss  for  each  city  and  each  state, 
and  these  are  the  real  rulers  of  the  United  States. 

Candidates  for  smaller  offices  are  selected  by  a  method  of  two 
steps.  The  first  is  a  convention  of  delegates  who  meet  and  are 
supposed,  of  their  own  free  will,  to  select  candidates.  As  a 
matter  of  fact,  a  selection  of  that  kind  seldom  occurs.  Usually 
the  boss  of  the  locality  makes  up  what  is  called  a  "slate"  or  list 
of  candidates  loyal  to  him,  and  they  are  nominated  by  the  con- 
vention without  murmur,  unless  a  second  boss  is  aspiring  to 
the  power  of  the  ruling  boss,  when  a  test  of  strength  between 
the  rival  bosses  comes  before  the  convention,  and  the  winning 
"slate"  is  carried  through.  With  the  exception  of  sporadic  in- 
dependent candidacies,  the  real  contests  over  offices  are  confined 
to  the  struggles  of  the  bosses. 

From  whence  do  the  bosses  who  rule  us  derive  their  power? 
They  are  rarely  elected  officials,  but  they  dictate  the  selection 


OUR  POLITICAL  SYSTEM  13 

of  every  official.  How  do  they  manage  to  make  themselves  the 
rulers  of  America,  to  constitute  themselves  a  nominating  Trust? 
Again  through  a  bad  system,  that  of  conventions. 

The  convention  was  originally  a  to^Yn.  meeting,  which  all  might 
attend,  and  at  which  all  citizens  might  vote.  In  such  a  meet- 
ing, a  man  of  influence,  one  with  many  friends,  would  naturally 
carry  many  measures  through  the  support  of  his  friends  and  his 
own  prestige.  Such  was  the  origin  of  the  boss.  He  is  a  man  of 
many  friends.  He  makes  a  business  of  having  as  many  friends 
as  possible,  and  of  looking  out  for  his  friends  and  having  his 
friends  look  out  for  him. 

It  would  thus  appear  that  America  is  ruled  by  a  class  of  men 
of  a  friendly  disposition.  So  it  is,  but  this  friendship  is  not 
exercised  towards  the  public,  but  on  the  contrary,  directly  in 
opposition  to  the  public  welfare. 

Each  of  the  great  parties  is  thoroughly  organized.  Every  dis- 
trict has  its  political  club  and  its  political  workers,  or  minor 
politicians  who  mingle  political  activities  with  their  ordinary 
business.  Among  the  workers  in  each  club  is  a  leader,  ostensibly 
elected  by  the  club,  but  in  reality  the  one  among  the  club  hav- 
ing the  greatest  ability  in  doing  favors  for  others  and  in  mak- 
ing them  expect  further  favors.  This  local  leader  then  busies 
himself  in  getting  solid  with  greater  leaders  and  other  promi- 
nent politicians,  so  that  when  the  time  comes  for  a  convention, 
through  his  real  or  supposed  influence  or  pull,  he  is  able  to  say 
which  of  the  workers  shall  go  as  a  delegate  to  represent  that  dis- 
trict. Such  a  delegate  represents,  consequently,  not  the  voters 
of  the  district  as  he  should,  but  the  interests  of  his  leader.  Thus 
the  convention  is  controlled  by  the  main  boss,  acting  through 
the  lesser  bosses,  the  main  boss  having  evolved  himself  from  a 
minor  to  a  major  position  by  his  ability  as  a  politician  in  mak- 
ing friends  and  gaining  influence,  by  getting  favors  for  his 
friends  and  then  being  able  to  deliver  the  votes  of  the  delegates. 

When  a  convention  is  held,  the  candidates  are  thus  the  pup- 
pets of  the  bosses,  and  the  second  step  is  then  in  order,  the 
primary  or  initial  or  nominating  election.  At  such  a  primary, 
which  is  where  the  constitution  begins,  the  voters  of  a  party  are 
entitled  to  vote  on  the  question  of  who  shall  become  the  candi- 
dates of  the  party  at  a  later  election.  The  primary  is  only  of 
use  in  determining  disputes  between  the  "slates"  of  rival  bosses 
who  are  unable  to  overcome  each  other  at  the  convention. 

A  fundamental  change,  however,  is  gradually  coming  over 


14  THE  PRICE  OF  INEFFICIENCY 

American  politics,  in  that  tlie  direct  primary  is  being  established, 
the  primary  prior  to  which  no  candidates  are  indicated.  The 
importance  of  the  direct  primary  issue  is  not  well  understood 
by  the  voters  generally,  but  it  presages  entirely  new  political 
conditions. 

The  candidates  for  the  higher  offices,  president,  governor  and 
the  like,  are  selected  by  party  conventions,  with  delegates  from 
all  parts  of  the  country  or  state,  there  being  no  primaries  for  the 
higher  offices,  the  bosses  controlling  entirely. 

There  is  as  yet  no  boss  for  the  whole  United  States  of  either 
party,  since  owing  to  the  distinct  organization  of  the  states,  the 
boss  of  one  state  gains  no  power  in  the  other  states,  though 
supreme  locally,  yet  there  have  been  presidents  who  owed  their 
nomination  to  the  single  favor  of  some  other  man. 

A  national  convention  is  thus  a  struggle  between  groups  of 
state  bosses  behind  the  curtain.  The  president  in  office  usually 
has  great  weight  and  can  do  much  to  influence  the  result  of  the 
convention,  but  more  often  than  not,  the  convention  develops 
rivalries  which  can  only  be  settled  by  the  nomination  of  a  dark 
horse,  a  candidate  not  at  first  considered  and  too  often  a  man  of 
minor  abilities. 

While  this  is  a  result  that  is  deplorable  it  is  not  as  much  so  as 
the  situation  in  which  the  oppositions  are  so  intense  as  to  cause 
the  rival  candidate  to  continue  in  the  field,  organizing,  when 
the  occasion  demands  it,  new  parties,  the  result  of  which  is 
simply  to  ensure  each  other's  defeat  and  the  putting  in  power 
of  the  candidate  of  another  party  who  may  represent  only  the 
desires  of  a  minority  of  the  electorate. 

Spectacles  of  this  kind  discredit  not  only  those  who  engage 
in  them,  but  our  methods  of  government,  both  in  our  own  eyes 
and  in  the  eyes  of  the  world. 

The  most  pernicious  results  of  the  boss  system  are  seen,  how- 
ever, in  its  local  manifestations.  The  local  boss  spends  his  time 
in  looking  after  the  interests  of  his  district.  If  a  criminal  is 
released,  he  finds  him  work  and  gains  a  friend.  If  a  man  is  ar- 
rested, the  boss  gets  a  bondsman  for  him  and  gains  another 
friend.  The  little  boss,  through  his  pull  with  a  more  important 
boss,  who  selected  the  mayor  who  appointed  the  chief  of  police, 
succeeds  in  paralyzing  the  law  which  would  reach  a  third  man. 
A  new  friend  is  gained.  A  harsh  law  is  slipped  through  the 
legislature.  Business  men  cannot  comply  with  its  requirements. 
They  evade  it  and  contribute  to  the  political  organization,  and 


OUR  POLITICAL  SYSTEM  15 

the  boss  gains  new  friends  perforce,  and  added  power  as  well. 
The  women  of  the  street  are  blackmailed ;  saloons  and  gambling 
houses  pay  unofficial  licenses  to  the  organization  and  law  after 
law  goes  on  the  statute  books  designed  only  to  furnish  means  for 
added  power  and  influence  for  the  organization.  Fat  offices  and 
commissions  are  created  furnishing  easy  berths  for  friends  of 
the  boss,  and  these  offices  affect  all  classes  of  business,  so  that 
politics  has  a  finger  in  every  pie.  This  is  politics  in  business 
and  is  called  patronage,  and  since  the  holders  of  these  fat  offices 
and  all  their  minor  employees  are  kicked  out  if  the  other  party 
comes  into  power,  they  devote  most  of  their  time  to  politics,  that 
is  to  increasing  the  power  of  the  organization  in  its  manifold 
ramifications. 

Contractors  for  vast  public  works  or  great  private  undertak- 
ings find  it  advisable  to  have  in  their  firms  certain  politicians,  as 
otherwise  contracts  would  be  lost.  Financiers  wishing  public 
franchises  supply  funds  to  both  the  gi'eat  parties,  thus  being 
sure  of  friendship  of  the  right  sort,  irrespective  of  the  whims 
of  the  voters  and  the  fortunes  of  election  day.  This  is  business 
in  politics. 

Such  conditions  exist  locally,  in  the  states,  and  nationally, 
and  the  boss  of  each  state  has  not  alone  the  local  patronage,  but 
his  share  of  the  national  patronage  and  graft,  graft  being  the 
fat  contracts  and  other  perquisities  both  legal  and  illegal  which 
have  grown  up. 

A  vast  system  thus  exists,  through  which  a  large  proportion 
of  the  voters  are  reached,  directly  or  indirectly,  through  some 
form  of  contract  of  personal  friendship  or  interest,  and  each 
voter  votes  for  his  own  interest  as  an  indi\idual  or  the  interest 
of  a  friend  as  against  real  public  policy.  The  whole  political 
organization  of  the  country  thus  works  automatically  against 
good  government  and  in  favor  of  graft  and  dishonest  adminis- 
tration, while  the  whole  thing  is  entirely  outside  the  constitu- 
tion and  opposed  to  liberty,  progress  and  the  true  interests  of 
all  concerned. 

The  control  of  the  legislatures  in  this  manner,  results  in  both 
national  and  state  laws  which  are  detrimental  to  the  public  wel- 
fare. The  system  rules  through  fear,  favor  and  graft,  and  is 
most  notoriously  in  evidence  in  the  state  legislatures  where  grab 
bills,  in  which  valuable  franchises  are  disposed  of  for  a  pittance ; 
ripper  bills,  cutting  the  other  party's  office  holders  out  of  office 
and  reducing  the  civil  service  list;  and  jokers,  or  hidden  provi- 


16  THE  PRICE  OF  INEFFICIENCY 

sion  for  ulterior  purposes  in  various  bills,  are  frequently  in  evi- 
dence. 

City  government  is  worse  than  state  government,  and  the 
national  government,  in  a  different  way,  is  worse  than  either,  for 
owing  to  the  intense  light  of  publicity  and  its  vaster  machinery 
though  it  is  not  so  dominated  by  bosses,  it  is  subject  to  a  certain 
financial  overlordship,  which  will  be  described  later. 

In  addition,  there  is  in  the  national  government  a  defect 
due  to  the  constitutional  organization  of  the  government,  which 
works  out  to  the  disadvantage  of  the  country  as  a  whole,  to  an 
enormous  degree,  dwarfing  the  vermin-like  activities  of  the  local 
politicians.  It  is  known  as  log  rolling  and  is  worthy  brother  to 
the  "pork  barrel."  It  affects  first  of  all  tariff  legislation,  the 
most  important  of  all  legislation. 

The  tariff  is  not  in  reality  an  American  institution.  It  does 
not  represent  the  real  feelings  of  Americans,  but  it  is  a  resultant 
of  various  special  interests. 

The  cotton  manufacturer  of  New  England  wishes  a  tariff  but 
the  public  does  not;  the  farmer  in  the  west  wishes  a  tariff  on 
wool,  but  the  public  v/ants  cheaper  clothing;  the  lumberman 
wants  a  tariff  on  lumber  but  the  public  wants  cheaper  houses; 
the  iron  manufacturer  wants  protection,  the  public  cheaper 
nails;  the  planter  in  the  south  wants  protected  sugar,  the  public 
free  sweets,  and  thus  each  section  of  the  country  has  its  own 
special  interest  for  which  it  wants  protection,  while  the  public 
as  a  whole  prefers  free  trade. 

The  sectional  interests,  when  represented  in  congress,  are 
forced  to  stand  together.  If  the  farmers'  congressman  threatens 
lower  tariff  on  sugar,  the  planters'  congressman  demands  cheaper 
clothing,  and  if  the  lumberman  wants  cheaper  nails  the  iron 
manufacturer  will  ask  for  cheaper  wood.  Thus  they  stand  in 
mutual  fear  and  necessity  of  each  other;  and  without  graft, 
bosses,  big  business  or  any  suspicion  of  any  of  them,  the  country 
is  automatically  forced  into  high  tariff  by  the  striving  of  each 
sectional  interest  for  sectional  advantages.  The  result  is  that 
the  representatives  in  congress  assembled  get  close  together  and 
each  allows  the  other  the  desired  advantage  on  condition  of  re- 
ceiving his  own  advantage,  and  the  rumble  of  the  log  rolling 
seems  to  disturb  no  one. 

Likewise  the  ' '  pork  barrel. ' ' 

Public  buildings,  particularly  post  office  buildings,  abound  in 
the  United  States,  all  built  by  the  national  government.     Small 


OUR  POLITICAL  SYSTEM  17 

towns  have  great  federal  edifices,  out  of  all  proportion  to  their 
needs,  while  others  have  only  a  rented  store.  It  all  depends 
on  the  political  complection  of  the  district.  If  a  congressman  is 
elected,  belonging  to  the  dominant  party,  and  the  congressman 
is  a  man  of  ability,  he  "gets  busy"  for  his  constituency,  and 
grabs  all  he  can  of  the  funds  of  the  whole  country  to  be  ex- 
pended in  his  own  district,  either  in  post  offices  or  other  public 
works,  such  as  river  and  harbor  improvements,  canals  and  levees, 
which  are  always  built  by  the  national  government. 

He  does  not  care  about  the  rest  of  his  country,  if  his  own  sec- 
tion fares  well  and  he  can  return  to  the  voters  and  say;  "See, 
not  what  I  have  done  for  the  country,  but  what  I  have  done  for 
you."  This  system  of  apportioning  public  improvements  for 
selected  localities  out  of  the  public  funds;  which  is  accomplished 
by  coteries  of  influential  congressmen  grouping  together  in  cer- 
tain combinations  for  the  benefit  of  their  own  localities,  shutting 
out  the  opposition  and  the  less  influential  congressmen  of  their 
own  party,  is  termed  cutting  the  "pork  barrel."  It  is  a  vast 
abuse,  and  one  of  the  greatest  sources  of  waste  and  extravagance 
in  America.  It  is  a  direct  and  inevitable  outcome,  however,  of 
the  American  governmental  organization  as  laid  down  in  the 
constitution,  and  one  of  the  things  which  the  framers  of  that 
instrument,  in  their  abounding  wisdom,  failed  utterly  to  foresee. 

In  the  formation  of  the  republic,  the  framers  of  the  constitu- 
tion were  compelled  to  take  particular  care  to  preserve  the 
rights  of  the  several  states ;  which  were  at  that  time  to  a  degree 
that  can  now  hardly  be  determined,  separate  states  or  countries. 
The  term  United  States  has  become  the  name  of  an  entity,  and 
not,  as  at  first,  the  description  of  a  union. 

If  we  imagine,  for  a  moment,  the  various  countries  of  Europe 
forming  the  United  States  of  Europe,  it  will  be  appreciated  what 
difficulties  the  framers  of  a  constitution  for  such  a  country 
would  encounter. 

The  framers  of  the  constitution  of  the  United  States  of  Amer- 
ica had  a  task  of  but  little  less  difficulty.  Nevertheless,  the 
United  States  as  an  entity  and  not  as  a  coalition  did  not  at  first 
exist. 

With  the  passage  of  time,  the  idea  of  the  union  as  an  entity, 
and  not  as  a  thing  of  discrete  parts,  became  established,  until 
now,  the  fact  that  the  states  were  once  sovereigns  has  entirely 
been  lost  sight  of.  The  states  are  now  merely  political  divisions 
and  the  American  is  a  citizen  of  the  United  States,  and  has  very 


18  THE  PRICE  OF  INEFFICIENCY 

little  more  patriotism  for  his  particular  state  as  such  than  he  has 
for  his  back  yard,  and  takes  much  less  interest  in  it  than  he  does 
in  the  baseball  club  representing  his  city. 

The  organizations  of  the  state  governments  continue,  however, 
with  considerable  vigor,  though  constantly  being  deprived  of 
powers  by  the  federal  government  through  supreme  court  deci- 
sions. 

Great  confusion  is  caused  by  the  fact  that  the  governor,  state 
senate  and  assembly,  and  the  judiciary  of  the  several  states  are 
duplicates  in  each  state  of  the  federal  organization,  while  each 
state  has  its  own  constitution.  The  federal  government  has 
charge  of  certain  matters,  such  as  the  coinage  of  money,  the 
post  office,  collection  of  duties,  the  army  and  navy;  while  the 
states,  in  addition  to  their  own  internal  affairs,  regulate  the  con- 
duct of  their  citizens  in  their  personal  affairs  and  are  supreme 
in  matters  of  divorce,  punishment  of  crimes  against  persons  and 
property  and  the  maintenance  of  courts  for  certain  classes  of 
cases.  A  highly  complex  and  cumbersome  system  of  legal  ma- 
chinery thus  exists  and  contradictions  are  innumerable.  Thus 
an  act  which  is  a  crime  in  one  state  is  an  innocent  diversion  in 
another,  but  as  each  state  must  give  credence  and  effect  to  the 
laws  of  its  neighbors,  it  happens  that  for  example,  a  man  in 
New  York  may  have  no  legal  right  to  re-marry  through  being 
the  guilty  party  in  a  divorce  action,  yet  he  may  re-marry  in 
another  state  and  return  to  New  York,  being  protected  by  the 
uredence  New  York  must  give  to  the  laws  of  the  other  state. 

Similarly,  a  man  may  be  legally  sane  in  one  state  and  legally 
insane  in  another,  he  may  have  a  legal  residence  in  one  state 
though  actually  living  in  another  and  escape  taxes  in  both,  and 
he  may  be  legally  dead  in  one  state  and  alive  in  another.  If  a 
criminal  escapes  to  another  state,  no  power  can  return  him  to 
the  state  in  which  he  committed  the  crime  unless  the  governor 
of  the  state  in  which  he  has  taken  refuge  wishes  to  have  him 
returned.  Not  even  the  federal  government  can  intervene,  and 
the  right  of  sanctuary  in  ancient  times  was  no  more  complete 
or  sacred.  The  states  are  thus  supreme  in  certain  legal  matters, 
though  having  no  place  in  the  popular  thought  as  separate  coun- 
tries. 

All  of  this  produces  vexatious  results,  entails  endless  actions 
at  law  and  permits  the  perpetrations  of  much  injustice.  The 
whole  of  England  has  fewer  judges  than  the  state  of  New  York 
alone,  and  America  is  a  paradise  for  lawyers.    The  individual  who 


OUR  POLITICAL  SYSTEM  19 

has  committed  a  crime  has  so  many  loopholes  of  a  legal  nature  to 
crawl  through,  that  convictions  are  extremely  difficult  to  obtain. 
The  law's  delays  in  civil  cases  are  long  and  trying,  and  the  Eng- 
lish system  is  followed  which  adds  further  complications.  Prec- 
edents are  followed,  including  those  of  old  English  common 
law,  and  the  attorney  who  can  dig  up  the  most  precedents  usually 
has  the  better  of  the  argument  in  court,  as  judges  prefer  not 
to  take  positions  contrary  to  those  of  earlier  decisions. 

This  complex  system  of  state  and  federal  laws  is  highly  waste- 
ful, and  the  body  economic  must  support  the  army  of  judges 
and  lawyers  who  might  otherwise  be  engaged  in  occupations 
better  suited  to  the  public  welfare. 

Another  cause  of  much  injustice  and  delay,  amounting  to 
a  denial  of  justice,  lies  in  the  testing  of  new  laws.  Congress  or 
a  legislature  passes  a  law,  but  it  is  not  in  reality  effective  until 
after  the  courts  have  decided  its  constitutionality,  that  is, 
whether  or  not  it  agrees  with  the  constitution. 

Whether  or  not  a  given  measure  will  prove  constitutional  is 
not  given  much  attention  by  legislators.  The  law  is  passed, 
whether  good,  bad  or  indifferent,  and  the  courts  must  exercise 
all  their  profundity  to  ascertain  what  the  law  makers  meant  to 
say,  and  then  decide  whether  they  had  the  right  to  say  it.  And 
further,  if  the  law  is  not  in  accord  with  public  sentiment,  judges 
construe  it  so  narrowly  that  it  loses  its  force.  If  a  new  law 
looks  like  a  living  thing  and  has  the  support  of  public  sentiment, 
judges  mete  out  punishment  to  the  luckless  offender  against 
the  new  statute,  until  finally  someone,  who  has  committed  the 
new  crime  by  an  act  which  was  not  previously  a  crime,  is  en- 
countered who  is  sufficiently  wealthy  and  pugnacious  to  make 
a  constitutional  case  of  it  and  it  then  goes  to  the  higher  courts. 

Often,  however,  no  test  case  coming  up  in  the  natural  order 
of  events,  an  attorney  or  an  association  of  some  sort,  by  arrange- 
ment with  the  court,  has  an  offender  arrested  for  the  express 
purpose  of  testing  the  constitutionality  of  the  law;  that  is  to 
say,  of  finding  out  whether  the  law-makers  have  really  made  a 
law  or  only  another  dead  letter.  In  the  case  of  the  more  im- 
portant laws,  repeated  constitutional  tests  will  be  inaugurated, 
based  on  different  provisions  of  the  constitution  and  if  the  law 
does  not  square  with  all  of  them  it  is  of  no  force  or  effect. 

Thus,  under  the  most  favorable  circumstances,  it  is  several 
years  after  a  law  has  been  passed  that  it  really  becomes  a  law, 
if  it  does  at  all,  and  in  many  cases  ten  to  twenty  years  elapse 


20  THE  PKICE  OF  INEFFICIENCY 

before  the  offenders  cease  to  question  a  law's  constitutionality. 
The  number  of  laws  declared  unconstitutional,  also,  is  very  large, 
and  thus  endless  confusion  and  uncertainty  exist  at  all  times  in 
regard  to  many  laws,  with  the  legislatures  constantly  grinding 
out  new  ones  to  continue  the  farce.  This  ridiculous  and  clumsy 
system  with  its  intolerable  delays,  entails  enormous  losses  and 
clouds  with  uncertainty  and  discourages  entirely,  countless  trans- 
actions. 

It  has  a  further  effect  of  inculcating  a  contempt  for  law,  so 
that  the  United  States  has  more  laws  and  fewer  law  abiding 
citizens  than  perhaps  any  country  on  earth.  There  is  small  fear 
of  the  law  in  the  United  States.  With  44,000  new  laws  in  1910, 
no  one  can  keep  up  with  them,  and  the  chances  of  a  law  breaker 
with  a  clever  lawyer  are  very  promising;  much  better  in  fact 
than  for  example  in  Canada,  where  laws  are  much  less  numerous 
and  much  more  highly  respected. 

The  effect  of  such  a  great  number  of  laws  is  shown  in  the 
increasing  extent  of  the  law's  delays. 

Justice  Howard  of  the  Supreme  Court  of  New  York,  states 
in  a  letter  to  Senator  L.  M.  Black  of  Brooklyn,  published  Feb. 
23,  1912: 

' '  There  are  too  many  laws,  too  many  courts,  too  many  appeals, 
too  many  technicalities.  Nobody  knows  the  law,  nobody  can 
know  the  law.  In  these  days  a  law  library  would  fill  a  barn. 
The  human  mind  cannot  comprehend  such  a  mass  of  stuff.  And 
its  bulk  is  increasing  at  an  appalling  rate.  Judges,  Governors 
and  legislators  are  working  at  a  feverish  pace  making  law  books. 
Thousands  of  thick  volumes  constitute  the  written  law.  A  dozen 
volumes  ought  to  contain  all  the  laws  of  the  State. 

"Five  Appellate  Courts  are  in  session  at  the  same  time  in 
this  State,  rendering  decisions  and  writing  opinions,  necessarily 
and  in  fact,  in  conflict  with  each  other.  One  Legislature  makes 
a  law  for  the  guidance  of  the  people ;  the  next  Legislature  repeals 
it.  A  Governor  advocates  the  passage  of  a  law  and  then  in  a 
few  months  urges  its  repeal.  Under  such  conditions,  who  can 
know  the  law? 

"The  law  should  be  firm  and  positive;  it  has  come  to  be  like 
quicksand,  and  slips  faster  than  you  can  place  your  feet.  This 
uncertainty  of  the  law  propagates  litigation;  it  breeds  lawsuits. 
Its  havoc  upon  the  tax-payers  is  frightful.  In  a  large  percent- 
age of  cases  it  costs  the  public  more  to  foot  the  bills  of  the  litiga- 
tion than  it  would  to  pay  the  claim  in  dispute. 


OUR  POLITICAL  SYSTEM  21 

"An  old  maxim  says:  'Every  man  is  presumed  to  know  the 
law.'  But  how  absurd  the  saying  is  now.  Nobody  can  know 
a  mass  so  discordant.  The  citizens  cannot  know  the  law,  the 
laA^^^ers  cannot  comprehend  the  law,  the  judges  cannot  interpret 
the  law.  The  Roman  maxim  might  be  modified  so  as  to  run: 
'Ignorance  of  the  law  excuses  no  one — except  the  judges.'  " 

Respect  for  law  in  Germany  is  much  greater  than  in  the 
United  States,  and  the  law  is  greater  than  the  individual.  An 
example  of  this  was  seen  recently  in  the  arrest  of  the  chauffeur 
of  the  Imperial  Chancellor,  Dr.  von  Behrmann  Hollweg,  while 
driving  the  Chancellor  post-haste  for  an  audience  of  the  Kaiser. 
The  chauffeur  was  fined  five  dollars.  A  similar  fate  befell  the 
chauffeur  of  the  Crown  Prince  while  driving  the  latter,  although 
the  appearance  of  the  Crown  Prince  as  a  witness  in  court,  con- 
troverting the  rate  of  speed  alleged  by  the  arresting  officer,  saved 
the  fine. 

We  manage  these  things  better  in  America,  where  the  chauf- 
feur of  a  city  official  or  alderman  may  well  feel  aggrieved  if 
he  does  not  receive  an  apology  from  an  officer  who  makes  the 
blunder  of  interfering  with  his  progress.  The  President,  when 
he  goes  automobiling,  on  campaign  and  other  tours,  instead  of 
attending  to  governmental  affairs  and  serving  the  public  at  his 
post  in  Washington,  is  accustomed  to  make  from  30  to  50  miles 
an  hour,  for  which  he  is  praised  by  the  newspapers,  who  thus 
perhaps  find  justification  for  running  their  own  delivery  wagons 
and  automobile  trucks  through  the  crowded  streets  at  fire  de- 
partment speeds.  If  the  President  and  other  officials  and  near 
officials  can  make  such  speeds  in  contravention  of  law,  certainly 
in  a  countiy  where  everj^body  is  equal,  a  mere  newspaper's 
wagon  may  do  the  same. 

The  economic  effect  of  legal  delays  is  that  of  vast  waste, 
and  its  correction  will  be  a  slow  and  tedious  work.  All  political 
influence  is  in  favor  of  the  law's  delays,  and  the  injured  citizen 
rarely  has  even  public  sentiment  on  his  side,  being  regarded  as 
a  kicker  or  a  grouch  and  being  listed  in  the  police  squeal  book 
or  squawk  sheet,  if  he  makes  too  insistent  a  stand  for  his  com- 
mon rights.  Like  the  worms  which  riddle  the  piling  of  harbor 
bulkheads,  our  vast  army  of  lawyers  are  undermining  the  whole 
social  structure.  They  are  a  national  pest  and  extravagance, 
and  the  country  would  be  blessed  if  law  schools  were  closed  for 
a  generation  to  let  the  course  of  nature  eliminate  the  superfluity. 


CHAPTER  III 
ADMINISTRATIVE  WASTE 

Economy  not  a  national  slogan — How  indirect  taxation  fosters  extrava- 
gance— Governmental  inefficiency  costs  $1,000,000  a  day — Where  the 
money  goes — Squanderings  of  the  post  office — The  pension  office  leak 
in  the  pipe  line  of  revenue — The  citizen  has  no  right  to  use  the  mails 
• — It  is  a  privilege  granted  by  the  post  master  general — Growth  of 
official  autocracy — Constant  effort  of  officialism  to  increase  its  powers 
— Inefficient  business  management  of  the  post  office — The  real  inward- 
ness of  the  fraud  order — Contrast  with  efficient  governmental  methods 
— Technical  advisers  to  German  ambassadors — How  Germany  skims 
the  cream  off  the  world's  technical  discoveries. 

Economy  is  not  one  of  the  American  virtues;  it  is  not  a 
ruling  passion  and  the  word  inspires  no  answering  heart  throb. 
In  short,  economy  is  not  popular,  and  the  economical  are  too 
apt  to  be  dubbed  ''tightwads."  There  being  little  economy  in 
the  individual,  little  can  be  expected  in  public  life,  for  the 
public  servant  in  America,  as  elsewhere,  gives  only  what  serv- 
ice is  demanded. 

No  president  desires  to  go  down  to  posterity  as  an  apostle 
of  economy.  Even  great  financiers  prefer  to  be  known  by  large 
dealings  rather  than  by  close  acquirings.  No  congressman  can 
arouse  the  enthusiasm  of  his  constituents  at  the  following  elec- 
tion by  recounting  his  exploits  in  cheese  paring.  Economy  is 
not  the  watchword  of  the  day,  much  less  of  the  night. 

Yet  even  the  spendthrift  has  moments  when  the  complacency 
of  the  economical,  founded  on  a  snug  surplus,  may  well  be 
envied.  The  United  States  is  passing  through  such  a  period. 
Loud  protestations  of  economy  are  being  made.  The  official 
.  neighbor  is  blamed  for  expenditures,  and  while  economy  is  of 
no  great  value  as  a  slogan,  the  accusation  of  extravagance  made 
by  the  demagogues  of  the  other  side  is  disagreeable  campaign 

shrapnel  to  dodge. 

Administrative  extravagance  in  the  United  States  arises,  how- 
ever, not  alone  out  of  the  natural  sentiment  of  the  public,  but 
out  of  other  important  considerations  as  well,  among  them  be- 

22 


ADMINISTRATIVE  WASTE  23 

ing  the  short  official  tenure  of  office,  the  difficulty  of  placing 
responsibility  for  extravagance,  lack  of  co-ordination  between 
branches  of  the  government,  lack  of  incentives  to  economy,  and 
the  systems  of  indirect  taxation  which  are  such  that  the  individ- 
ual pays  without  knowing  how  many  of  the  pennies  of  his  dol- 
lar go  to  the  government,  and  without  knowing  what  they  are 
spent  for. 

The  extent  of  administrative  waste  is  so  vast  that  it  can 
hardly  be  conceived.  According  to  Senator  Aldrich,  not  less 
than  $300,000,000  could  be  saved  yearly  if  the  government  were 
run  on  a  business  basis.  Even  if  congress  and  the  administra- 
tion would  work  in  harmony  instead  of  constantly  seeking  polit- 
ical advantage,  not  less  than  $100,000,000  could  be  saved  an- 
nually, or  10%  of  the  government's  total  expenditures  of 
$1,000,000,000.  In  an  admirable  article  on  the  subject,  "How 
a  Business  Man  Would  Run  the  Government,"  by  A.  W.  Dunn 
in  the  World's  Work  for  June,  1911,  the  following  is  given  as 
an  approximation  of  where  the  saving  could  be  effected: 

Consolidation  of  military  posts  and  other  army  reforms..  $25,000,000 

Consolidation  of  navy  yards  and  general  naval  economy..  25,000,000 

Purging    pension    rolls    40,000,000 

Post   Office   economies  and   reforms,   resulting  in   increased 

revenue     50,000,000 

Public   buildings    25,000,000 

Rivers    and    harbors     25,000.000 

Reforms    in    departmental   bureaus    25,000,000 

Congress    2,000,000 

Cutting   of   courts,   commissions,   bureaus    3,000,000 

Traveling    expenses,    junkets,    etc     5,000,000 

Inspection  and  special  services   5,000,000 

Miscellaneous    30,000,000 

Total $250,000,000 

"The  estimates  are  approximately  on  the  basis  of  the  cost 
of  the  government  before  the  great  era  of  extravagance  began. 
It  may  be  found  that  in  several  instances  the  estimates  are  too 
high,  and  in  others  too  low,  but  the  figures  will  serve  as  a  good 
working  basis. 

"They  do  not  touch  upon  the  expenditures  for  interest  or 
the  payment  of  the  public  debt  or  for  the  building  of  the  Pan- 
ama Canal.  In  the  eight  years  between  1902  and  1910,  the  ex- 
penses of  the  army  increased  $43,500,000;  of  the  navy,  $55,- 
750,000,  of  the  pensions  $22,000,000,  and  of  the  whole  govern- 


24  THE  PRICE  OF  INEFFICIENCY 

ment,  between  $290,000,000  and  $300,000,000.  Such  fibres 
help  to  show  approximately  in  what  items  savings  can  be  ac- 
complished and  how  large  the  savings  might  be." 

What  does  $300,000,000  a  year  mean? 

For  one  thing,  it  means  $16.50  for  each  household,  or  five 
time  as  much  as  the  average  governmental  income  taxation  of 
the  family  head  in  Germany. 

Each  family  in  the  United  States  thus  contributes  $16.50 
a  year,  so  that  the  government  officials  will  not  feel  stinted. 

The  amount  of  \vaste  annually  would  pay  the  schooling  of 
fifty  thousand  young  men  in  college  or  industrial  training 
schools.  This  w^ould  be  a  larger  number  than  the  entire  student 
body  matriculated  at  a  dozen  of  the  largest  universities  of  the 
country. 

It  would  establish  in  every  city  of  the  United  States  having 
a  population  of  25,000  or  over,  every  year,  an  additional  mil- 
lion dollar  factory,  and  leave  seventy-five  more  such  factories 
for  still  smaller  towns,  and  give  employment  to  many  thousands 
of  workers  now  in  enforced  idleness. 

The  two  principal  items  in  which  great  savings  are  possible 
are  the  pension  and  post  office  expenditures.  The  vast  ex- 
penditures for  pensions,  increased  in  1912  to  $173,000,000  a  year, 
are  a  burden  which  part  of  the  public  bears  for  the  benefit  of 
another  part,  and  M^hich  has  been  carried  so  long  that  it  has  be- 
come a  habit.  Inherently,  however,  it  is  another  evidence  of 
the  lack  of  respect  which  the  citizen  of  a  republic  feels  for  the 
form  of  government  which  he  so  loudly  extols.  Everyone  in 
America  is  willing  to  die  for  his  country,  if  need  be,  but  if  he 
escapes  a  military  funeral,  he  returns  to  private  life  with  his 
sense  of  patriotism  fully  satisfied  and  ready  to  draw  a  pension 
on  the  flimsiest  of  pretexts.  He  respects  his  country's  flag  but 
the  treasury  is  an  entirely  different  matter.  The  vigor  with 
which  he  fought  the  enemy  in  battle  is  now  directed  towards 
procuring  a  pension,  and  such  is  the  success  met  with  in  this 
field,  that  in  the  case  of  the  Spanish  war  in  wliich  the  total 
number  of  casualties  was  but  9378  and  the  killed  but  698,  out 
of  an  enlistment  of  312,000,  there  are  now  pensioners  on  the 
rolls  more  than  the  whole  of  Shafter's  army,  and  in  fifteen 
years  there  will  be,  at  the  present  rate  of  increase,  half  as  many 
pensioners  as  the  entire  enlistment. 

The  average  pensioner  who  is  drawing  a  pension  that  he  is 
not  truly  entitled  to,  feels  he  has  turned  a  rather  clever  trick 


ADMINISTRATIVE  WASTE  25 

on  Uncle  Sam.  That  his  quarterly  instalment  is  a  species  of 
pocket  picking  of  the  collective  pocket  of  his  neighbors,  does 
not  occur  to  him,  or  if  it  does  he  is  not  much  troubled.  There 
is  in  America  little  of  the  patriotism  of  honesty  towards  the 
government.  It  is  a  great  grab  bag  and  he  that  grabs  most 
grabs  best. 

No  one  questions  that  the  great  majority  of  pensioners  are 
justly  on  the  rolls,  that  there  are  great  numbers  of  veterans  to 
whom  the  pension  is  the  only  stay  and  sole  support.  To  these 
no  one  would  deny  the  stipend.  But  under  cover  of  their  neces- 
sity, a  great  number  of  pensioners  have  gotten  on  the  rolls ;  fake 
veterans,  bounty  jumpers,  impersonators,  camp  followers,  de- 
serters, malingerers  and  bogus  widows.  The  method  of  grant- 
ing pensions  by  bills  introduced  by  congressmen,  has  the  effect 
of  giving  the  congressman  the  greatest  possible  incentive  to 
padding  the  pension  rolls,  since  every  pension  obtained  places 
the  pensioner,  if  not  the  members  of  his  family,  under  a  debt  of 
political  gratitude.  It  is  another  phase  of  the  political  system 
which  builds  public  buildings  where  they  are  not  needed  and 
improves  rivers  and  harbors  unnecessarily,  another  example  of 
a  public  treasury  which  is  without  legislative  guardians  and  in 
which  all  the  keepers  of  the  treasury  have  every  incentive  to 
squander  and  none  to  preserve. 

During  the  discussion  of  the  proposed  pension  appropriation 
for  1912,  among  the  protests  against  the  extension  of  pension 
waste  was  that  of  Representative   Callaway,   who  said: 

'*I  have  a  bill  here  introduced  by  the  genial  gentleman  from 
Iowa  (Mr.  Pepper)  for  Thomas  Brown.  Gentlemen  will 
find  it  on  page  38.  He  is  64  years  old  now.  He  must  have 
joined  the  army  when  he  was  only  15  years  of  age.  I  do  not 
understand  how  he  got  in  at  that  age.  On  looking  at  the  laws 
I  find  that  a  person  could  not  enlist  until  he  was  17,  but  accord- 
ing to  this  statement,  he  got  in  when  he  was  15.  He  enlisted 
on  the  10th  of  May,  1864,  stayed  in  the  service  until  the  24th 
of  September,  1864 — four  months  and  fourteen  days. 

"He  has  draAvn  a  pension  of  $12  a  month  from  1890  until 
now,  and  this  bill  proposes  to  increase  his  pension  to  $24.  He 
was  never  in  a  battle.  He  never  received  any  injury  from  the 
service  whatever  according  to  the  statement  and  I  take  it  that 
it  is  made  as  favorable  to  him  as  possible.  He  has  already 
drawn  from  the  government  for  that  four  months'  service, 
$3,312,  and  if  he  lives  after  this  bill  is  granted  as  long  as  an 


26  THE  PRICE  OF  INEFFICIENCY 

ordinary  pensioner  is  expected  to  live,  twenty  years,  which  will 
make  him  84^he  will  draw  $5,760  more,  or  a  total  of  $9,072 
from  the  government  for  four  months'  summer  service  in  the 
army  when  he  never  was  in  a  battle,  according  to  the  statement 
and  cannot  trace  any  of  his  disabilities  to  service  in  the  army. 

"But  that  is  not  the  worst  part  of  it.  I  see  from  this  report 
that  he  owns  a  one-third  interest  in  a  homestead  worth  $3,000. 
He  is  worth  more,  ]\Ir.  Speaker,  than  75%  of  the  voters  in  this 
country.  Besides  that,  he  has  a  yearly  income  of  $180.  We 
propose  now  to  give  this  man  a  pension,  in  addition  to  the  $12 
he  is  already  getting,  of  $12  more,  making  it  $24  a  month,  IVIr. 
Speaker,  and  saddle  that  on  the  voters  of  this  country,  the  tax- 
payers of  this  land,  the  widows  from  one  end  of  the  Union  to 
the  other,  who  have  to  work  for  their  living,  and  90%  of  them 
are  in  a  worse  condition  financially  than  he  is." 

The  total  cost  of  the  Civil  War  is  estimated  at  from  5,500  to 
6,000  millions,  but  pensions  approximating  4,000  millions  have 
already  been  paid  and  it  is  estimated  that  before  the  last  pen- 
sioner is  removed  by  death,  the  pensions  will  have  equaled  the 
cost  of  the  war. 

While  the  burdens  of  the  standing  armies  of  Europe  are  a 
fruitful  source  of  reproach,  the  cost  to  the  United  States  of  the 
standing  armies  of  pensioners  is  much  greater  than  the  cost 
of  four  of  the  greatest  pension  armies  of  Europe,  namely  those 
of  Austria-Hungary,  France,  Germany  and  Great  Britain 
which  total  less  than  $100,000,000. 

One  of  the  causes  of  the  great  number  of  pensioners  lies  in 
the  fact  that  most  of  the  wars  of  the  United  States  have  been 
fought  with  soldiers  and  officers  Avho  at  the  outset  were  amateurs 
in  the  art  of  war.  Including  the  Revolution,  the  number  of 
regulars  has  been  549,115,  compared  with  3,686,175  volunteers, 
and  excluding  the  Revolution,  317,344  regulars  to  3,522,058 
others.  This  accounts  for  the  great  losses  from  invalidism  and 
an  increase  of  pensions  subsequently. 

As  the  regular  soldier  is  not  the  pension  hunter  that  the 
militiaman  afterwards  becomes,  and  as  the  losses  of  the  regulars 
are  not  so  great,  a  safeguard  against  pension  waste  in  the  fu- 
ture lies  to  a  certain  extent  in  an  adequately  trained  skeleton 
of  regulars. 

More,  however,  lies  in  a  new  system  of  granting  pensions  in 
which  the  just  claimant  may  have  justice  done,  and  the  fact 
that  he  is  a  voter  has  no  bearing  on  the  case.     In  short,  pen- 


ADMINISTRATIVE  WASTE  27 

sions  must  be  taken  out  of  politics  and  politics  out  of  pen- 
sions. 

The  post  office  department  of  the  United  States  has  powers 
more  autocratic  and  inquisitorial  than  perhaps  any  department 
of  the  government,  if  not  of  any  governmental  department  in 
any  civilized  country. 

No  citizen  of  the  United  States  has  any  right  to  receive  a 
letter,  or  have  a  letter  delivered  when  mailed  by  him,  except  at 
the  pleasure  of  the  department.  The  courts  have  decided  that 
the  use  of  the  mails  is  a  privilege  and  not  a  right.  Thus  citizens 
who  are  taxed  for  the  maintenance  of  the  system  are  not  entitled 
to  use  it.  The  officials  of  the  department,  if  they  decide  that 
a  business  is  being  carried  on  in  what  they  decide  is  a  fraudulent 
manner,  may  issue  at  their  discretion  without  review  by  the 
courts,  what  is  termed  a  fraud  order,  and  mail  addressed  to  the 
person  under  fire  is  returned  to  his  correspondents  so  marked. 
The  individual  is  thus  practically  branded  as  a  criminal  without 
any  trial,  and  is  caused  to  suffer  perhaps  heavy  losses  without 
any  means  of  defending  himself.  Many  thousands  of  such  fraud 
orders  have  been  issued  and  they  are  constantly  being  used. 
No  matter  how  urgent  the  business  or  how  great  the  loss  in- 
volved, the  delivery  of  mail  depends  on  the  official  pleasure  of 
the  post  office  department.  They  determine  the  character  of 
the  mail  which  they  will  allow  the  rest  of  their  fellow  citizens 
to  receive. 

They  also  have  the  power  of  refusing  to  transmit  what  they 
deem  obscene  matter.  This  may  include  medical  publications, 
and  in  a  recent  instance,  a  sociological  work  on  the  subject  of 
white  slavery  prepared  by  a  committee  of  public  spirited  citi- 
zens, of  whom  John  D.  Rockefeller,  Jr.,  was  one,  was  so  refused 
transmission. 

The  officials  of  the  department  also  decide  the  fates  of  pub- 
lications. The  securing  of  the  second  class  rate  is  a  necessity 
to  a  publisher.     It  depends  on  the  ruling  of  an  official. 

The  post  office  department  thus  has  to  a  great  extent  extra- 
legal powers.  And  where  such  powers  exist,  it  is  invariably  the 
course  of  officials  to  seek  to  extend  and  enlarge  tliem  to  the  great- 
est degree.  A  government  however  wisely  constituted,  comes  in 
time  to  be  covered  with  growths  of  official  usurpation,  until  the 
whole  fabric  falls  to  pieces.  The  change  from  honest,  patriotic 
administration  to  one  of  official  autocracj^  is  gradual,  but  a  sure 
indication  of  national  decay.     While  the  officials  of  the  post 


28  THE  PRICE  OF  INEFFICIENCY 

office  department  may  be  wise  men,  it  is  not  within  tlie  wisdom 
of  any  man  to  exercise  justly  such  powers  as  they  possess  when 
not  subject  to  review.  They  occupy,  however,  a  minor  position 
of  culpability,  compared  with  a  public  sentiment  which  permits 
them  to  have  such  powers.  Acquiescence  in  acts  of  official 
usurpation  distinguishes  a  subservient  from  a  liberty  loving 
people. 

A  department  thus,  which  possesses  so  much  power,  may  be 
depended  upon  to  exercise  it  to  the  disadvantage  of  the  public. 
Bismarck  when  he  recommended  criticism  of  officials  for  the 
sake  of  improvements,  might  well  have  recommended  more  criti- 
cism as  a  preservative  for  the  seiwice  already  being  rendered. 

The  post  office  department  has  lately  overreached  itself  in 
an  attempt  to  obtain,  in  an  underhanded  manner,  legislation 
which  would  have  enabled  it  to  make  certain  changes  in  postal 
classifications,  with  the  power  of  practically  driving  out  of  busi- 
ness large  numbers  of  magazines;  a  form  of  periodical  which, 
unlike  newspapers,  being  without  political  obligations,  have 
prospered  greatly  by  a  fearless  criticism  of  governmental  and 
other  usurpations. 

In  the  course  of  the  criticisms  brought  out,  it  has  been  proved 
that  while  showing  a  great  deal  of  activity  in  managing  other 
people's  business,  the  post  office  department  has  not  taken  the 
beam  out  of  its  own  eye.  It  has  been  found  that  the  post  office 
cannot  tell  the  cost  of  transporting  the  different  classes  of  mail ; 
that  its  system  of  keeping  accounts  is  highly  cumbersome  and 
old  fashioned;  that  the  method  of  paying  transportation  com- 
panies for  carrying  the  mails  is  such  that  the  government  pays 
excessively  for  the  service,  and  that  numerous  wasteful  methods 
of  business  are  in  vogue. 

At  the  same  time  the  service  rendered  in  the  dispatch  and 
delivery  of  the  mails  is  far  inferior  to  that  of  tlie  principal 
European  countries. 

Every  year  there  is  a  postal  deficit  where  under  proper 
methods  there  should  be  a  large  actual  profit,  besides  an  enor- 
mous impetus  to  business. 

It  would  appear  to  be  more  than  a  coincidence  that  the  fraud 
order  law,  which  was  passed  largely  at  the  instance  of  the 
Chicago  Board  of  Trade  and  certain  eastern  financial  interests, 
is  chiefly  directed  at  the  suppression  of  financial  undertakings 
which  come  under  question,  and  which  compete  directly  for  the 
investors'  money  with  the  stock  exchanges  and  boards  of  trades* 


ADMINISTRATIVE  WASTE  29 

investment  offerings.  It  would  thus  appear  that  if  any  under- 
taking desires  capital,  the  course  of  wisdom  would  not  be  to 
tempt  the  post  office  department  and  its  investigations,  but  to 
arrange  for  the  flotation  of  the  stock  through  some  established 
brokerage  channel.  Thus  the  laws  of  a  country  may  be  made 
to  work  together  for  the  good  of  those  who  love  the  lobby. 

Even  in  minor  matters,  the  post  office  department  is  able  to 
exercise  a  remarkable  intelligence.  For  example,  if  a  special 
delivery  letter  is  sent  and  the  addressee  is  not  found,  the  letter 
is  carried  back  to  the  post  office  to  be  later  delivered  with  the 
regular  mail,  instead  of  being  left  at  the  address  when  first 
taken  there.  In  many  cases  the  object  of  the  sender  is  thus 
defeated.  The  utter  stupidity  of  taking  a  letter  to  an  address 
and  then  taking  it  away  again  can  only  be  equaled  by  official 
regulations.  Registered  letters  require  excessively  long  addi- 
tional time  in  transmission.  The  cashing  of  a  money  order  is 
a  process  compared  to  which  the  opening  of  an  account  in  a 
bank  is  a  simple  incident.  And  if  a  letter  is  refused  by  an 
addressee  because  of  lack  of  postage,  it  goes  to  Washington  in- 
stead of  back  to  the  sender.  All  these  are  examples  of  bad 
business  methods  which  affect  every  user  of  the  mails  and  create 
a  vast  amount  of  unnecessary  inconvenience. 

And  it  is  cheaper,  for  instance,  to  send  a  package  of  a  certain 
class  the  6,000  miles  from  San  Francisco  to  Germany  than  the 
6  miles  from  Manhattan  to  Brooklyn. 

What  then  is  the  matter  with  the  post  office  department? 

The  answer  is,  inefficient  business  management.  In  no  other 
department  are  the  results  of  incompetency  so  pronounced. 
The  distribution  of  pensions,  though  done  in  a  cumbersome  and 
costly  manner,  is  still  merely  a  governmental  function  in  which 
incompetency,  as  in  many  other  departments,  escapes  notice. 
But  in  the  post  office  which  is  a  business  affecting  other  busi- 
nesses, and  in  which  comparisons  can  be  made  directly  with 
other  transporting  organizations,  the  incompetency  of  its  admin- 
istration is  at  once  in  painful  and  profuse  evidence. 

And  at  the  bottom  of  it  again  comes  the  question  of  politics. 
The  business  of  transporting  and  delivering  the  mails  is  one 
that  should  receive  the  attention  of  men  of  long  experienqe  and 
training,  but  with  each  political  change,  a  vast  change  is  made 
in  the  post  office.  Postmasters  all  over  the  country  are  changed 
at  wholesale,  and  inroads  are  made  wherever  possible  in  the 
civil  service.     The  post  office  is  the  seat  of  the  greatest  federal 


30  THE  PRICE  OF  INEFFICIENCY 

patronage.  The  carrjdng  of  the  mails  is  thus  made  an  inci- 
dent of  politics  and  the  prompt  and  efficient  service  which  is 
liberally  paid  for  and  which  would  be  a  great  boon  to  business 
and  a  vast  convenience  to  everyone,  is  sacrificed  to  reward  a 
horde  of  insignificant  political  workers  with  positions,  in  which 
the  most  noticeable  thing  they  do  is  to  display  their  incompe- 
tency. 

The  mismanagement  and  waste  in  the  post  office  and  in  pen- 
sions have  their  counterparts,  perhaps  less  pronounced,  in  prac- 
tically every  department  of  the  government.  The  great  honey- 
comb of  politics  in  business  and  business  in  politics,  runs 
through  and  through  the  government,  with  every  incentive  for 
its  continued  growth  and  nothing  but  sporadic,  misdirected  and 
ineffective  flashes  of  the  peculiar  flash-in-the-pan  American  pub- 
lic sentiment,  which  burns  hotly  one  day  and  is  forgotten  the 
next,  to  oppose  it. 

In  contrast  to  the  waste  and  inefficiency  of  our  governmental 
system,  is  a  recent  movement  made  by  Germany  in  the  appoint- 
ment of  technological  advisers  to  her  ambassadors  and  ministers 
in  foreign  countries.  This  move  is  described  in  the  United 
States  Daily  Consular  &  Trade  Reports  for  Sept.  2,  1911 : 

"The  assignment  of  commercial  experts  to  various  important 
German  consulates  has  been  found  so  advantageous  in  promot- 
ing German  exports  that  it  is  now  proposed  to  supplement  them 
with  special  experts  for  answering  technical  questions. 

"In  many  cases  the  commercial  experts  are  not  in  the  position 
to  represent  Germany  industiy  so  far  as  it  relates  to  questions 
of  a  purely  technical  nature,  and  they  do  not  possess  the  neces- 
sary professional  knowledge  to  answer  the  detailed,  exhaustive 
and  at  times  right  specific  questions  addressed  to  them.  This 
task  will  be  given  to  the  technical  advisers  to  be  appointed. 
Their  field  of  activity  will  lie  in  following  the  progress  of  the 
industrial  development  of  a  foreign  country  and  reporting 
about  all  technical  novelties." 

"This,"  says  the  New  York  Tribune,  "is  characteristic  of 
Germany,  and  of  the  superlative  paternalism  of  her  government. 
In  no  other  land  does  the  government  pay  so  much  attention  to 
industrial  and  commercial  education  and  to  technical  training 
in  the  arts  and  sciences.  There  is  not  a  trade  or  department  of 
industry  of  commerce  for  which  the  German  government  does 
not  provide  the  most  thorough  training.  There  can  be  no  doubt 
that  to  this  circumstance  are  due  in  large  measure  the  marvel- 


ADMINISTRATIVE  WASTE  31 

ous  mdiistrial  and  commercial  growth  of  that  country  and  its 
j:)ower  to  outstrip  rivals  which  do  not  resort  to  such  means  of 
developing  their  efficiency.  Now,  having  provided  for  domestic 
instruction,  she  proposes  to  learn  all  that  there  is  to  be  learned 
abroad,  discreetly  beginning  in  those  two  countries  which  she 
recognizes  to  be  her  most  formidable  rivals  and  in  which,  be- 
cause of  their  great  efficiency  and  progress,  there  is  presumably 
most  to  be  learned. 

"The  new  step  is  perfectly  logical,  in  a  double  respect.  It  is 
as  logical  thus  to  seek  national  instruction  abroad  as  it  is  to 
provide  national  instruction  at  home.  If  a  government  main- 
tains industrial  schools  at  home,  it  may  properly  send  official 
students  abroad.  If,  moreover,  it  sends  diplomatic  agents  to 
observe  the  arts  of  war,  it  may  fittingly  send  them  to  observe 
the  arts  of  peace.  It  has  long  been  the  custom  to  appoint  mili- 
tary and  naval  attaches  to  embassies.  This  new  action  of  Ger- 
many's will  be  placing  economics  on  the  same  plane  of  official 
recognition  and  cultivation  as  militarism.  If  it  is  quite  natural 
that  it  should  be  taken  by  the  government  which  has  been  pay- 
ing most  attention  to  industrial  and  commercial  education,  it  is 
a  significant  circumstance  that  this  noteworthy  recognition  of 
the  arts  of  peace  should  be  first  given  by  that  government  which 
is  supposed  to  be  most  of  all  devoted  to  and  absorbed  in  the  arts 
of  war," 

This  supposition,  it  may  be  said  in  passing,  is  quite  un- 
founded in  fact,  as  a  comparison  of  costs  of  armaments  shows 
that  the  annual  burden  per  capita  is  in  Germany  $5.30  as  against 
$8.00  in  Great  Britain,  $6.75  in  France  and  $3.10  in  the  United 
States. 


CHAPTER  IV 
WHAT  IS  CONSERVATION? 

What    conservation    really    means — Nature's    reckoning — The    forests    of 
America — They  cover  one  acre  in  four — The  cost  of  locomotive  sparks 

50,000,000  acres  of  forest  fires  every  year — How  two-thirds  of  the 

timber  that  leaves  the  forest  is  wasted — Methods  of  modern  forestry 
• — The  army  as  a  forest  patrol — Success  of  rain-making  cannons  in 
Switzerland — Legislation  that  destroys  forests — Decreasing  mineral 
resources — When  the  last  lump  of  coal  is  mined — Petroleum  passing 
into  history — The  crime  of  pliosphate  rock  exports — Chemistry,  the 
science  economical — The  gilded  romance  of  by-products — Untouched 
millions  in  American  peat — The  extravagance  of  the  farmer — How  his 
land  goes  to  sea — How  his  opportunities  take  wings — How  he  might 
double  his  crops  instead  of  his  mortgages — An  endless  chain  of  dis- 
asters— Our  unharnessed  water  power — Only  one  fiftieth  of  it  utilized — 
A  waste  equal  to  225,000,000  tons  of  coal  a  year — Undrained  lowlands 
— Homes  for  10,000,000  under  water  that  might  be  reclaimed. 

Conservation,  that  dignified  and  easy-going  old  word,  pursu- 
ing its  pompous  enough  course  through  the  vocabulary,  must  be 
rather  astonished  at  the  prominence  that  has  been  thrust  upon 
it  within  the  last  few  years.  It  is  as  though  some  respected 
old  mutton-chops  had  suddenly  been  snatched  from  his  small 
orbit  of  business  and  recreation,  and  placed  at  the  head  of 
Coxey's  aniiy.  Conservation  can  hardly  know  itself  in  its  new 
surroundings  and  prominence. 

It  is  doubtful  if  many  others  know  it,  either.  It  does  for  a 
battle  cry,  a  slogan  of  remonstrance,  but  what  conservation 
really  means,  the  complicated  clash  of  interests  back  of  it,  and 
what  it  should  mean,  is  as  yet  an  unopened  book  to  the  Ameri- 
can public. 

To  the  average  citizen,  conservation  means  something  about 
forests  several  thousand  miles  away.  What  conservation  should 
mean  is  the  proper  use  of  the  resources  of  the  country,  with 
a  due  proportion  for  to-day  and  enough  for  to-morrow's  use  left 
for  posterity. 

No  country  is  so  wasteful  of  its  natural  resources  as  America, 

nor  so  extravagant  of  human  life  and  property.     The  vast  losses 

32 


WHAT  IS  CONSERVATION?  33 

through  carelessness  and  neglect  of  proper  precautions  make  a 
terrible  annual  total.  The  government  might  be  left  to  waste 
as  it  will,  if  the  waste  of  carelessness  could  be  overcome. 

Yes,  administrative  inefficiency  is  largely  to  blame  for  the 
wastes  of  carelessness,  since  with  proper  utilization  of  the  facili- 
ties which  the  government  has  at  hand,  and  a  little  additional 
expenditure  of  money  and  common  sense,  great  savings  could 
be  effected. 

According  to  reports  of  the  Department  of  Agriculture, 

' '  Our  industries  which  subsist  wholly  or  mainly  on  wood,  pay 
the  wages  of  more  than  1,500,000  men  and  women. 

"Forests  not  only  grow  timber,  but  they  hold  the  soil  and 
conserve  the  streams.  They  abate  the  wind  and  give  protection 
from  excessive  heat  and  cold.  Woodlands  make  for  the  fiber, 
health  and  happiness  of  the  citizens  and  the  nation. 

"Our  forests  now  cover  550,000,000  acres  or  about  one-fourth 
of  the  United  States.  The  original  forests  covered  not  less  than 
850,000,000  acres. 

"We  have  200,000,000  acres  of  mature  forests,  in  which  yearly 
growth  is  balanced  by  decay;  250,000,000  acres  partly  cut  over 
or  burned  over,  but  restocking  naturally  with  enough  young 
growth  to  produce  a  merchantable  crop,  and  100,000,000  acres 
cut  over  and  burned  over,  upon  which  young  growth  is  lacking 
or  too  scanty  to  make  merchantable  timber. 

"We  take  from  the  forests  yearly,  including  waste  in  log- 
ging and  in  manufacture,  23,000,000  cubic  feet  of  wood. 

"Since  1870  forest  fires  have  destroyed  an  average  of  50 
lives  and  $50,000,000  worth  of  timber.  Not  less  than  50,000,000 
acres  of  forests  is  burned  over  yearly.  The  young  growth  de- 
stroyed by  fire  is  far  more  valuable  than  the  merchantable  tim- 
ber burned. 

"One-fourth  of  the  standing  timber  is  lost  in  logging.  The 
boxing  of  long  pine  leaf  for  turpentine  has  destroyed  one-fifth 
of  the  forests  worked.  The  loss  in  the  mill  is  from  one  to  two- 
thirds  of  the  timber  sawed.  The  loss  of  the  mill  product  in 
seasoning  and  fitting  for  use  is  from  one-seventh  to  one-fourth. 

"Of  each  1,000  feet  which  stood  in  the  forest,  an  average  of 
only  320  feet  of  lumber  is  used. 

"We  take  from  our  forests  each  year,  not  counting  tlie  loss 
by  fire,  three  and  one-half  times  their  yearly  growth.  We  take 
40  feet  per  cubic  acre  for  every  12  feet  grown ;  we  take  260  feet 
per  capita,  while  Germany  uses  37  and  France  25  cubic  feet. 


34  THE  PRICE  OF  INEFFICIENCY 

"We  tax  our  forests  under  the  general  property  tax,  a 
method  abandoned  long  ago  by  every  other  great  nation.  Pres- 
ent tax  laws  prevent  reforestation  of  cut-over  land  and  the  per- 
petuation of  existing  forests  by  use. 

"Great  damage  is  done  to  standing  timber  by  injurious  forest 
insects.     Much  of  this  damage  can  be  prevented  at  small  cost. 

"To  protect  our  farms  from  wind  and  to  reforest  land  best 
suited  for  forest  growth  will  require  tree  planting  on  a  larger 
area  than  Pennsylvania,  Ohio  and  West  Virginia  combined. 
Lands  so  far  successfully  planted  make  a  total  area  smaller  than 
Rhode  Island;  and  year  by  year,  through  careless  cutting  and 
fires,  we  lower  the  capacity  of  existing  forests  to  reproduce  their 
like  again,  or  else  we  totally  destroy  them. 

"In  spite  of  substitutes,  we  shall  always  need  much  wood. 
So  far  our  use  of  it  has  steadily  increased.  The  condition  of  the 
world's  supply  of  timber  makes  us  already  dependent  upon 
what  we  produce.  We  send  out  of  our  country  one  and  a  half 
times  as  much  timber  as  we  bring  in.  Except  for  finishing 
woods,  relatively  small  in  amount,  we  must  grow  our  own  sup- 
ply or  go  without.  Until  we  pay  for  our  lumber  what  it  costs 
to  grow  it,  as  well  as  what  it  costs  to  log  and  saw,  the  price 
must  continue  to  rise." 

In  certain  years,  the  losses  from  forest  fires  amount  to  $200,- 
000,000  in  the  standing  timber  alone,  besides  the  other  losses 
involved. 

One  of  the  greatest  causes  of  forest  fires  is  locomotive  sparks. 
This  is  easily  preventable,  by  requiring  locomotives  passing 
through  forests  to  burn  oil  instead  of  coal.  Until  railroads 
are  able  to  save  a  few  dollars  in  fuel  expenses  by  the  adoption 
of  oil  burning  locomotives,  the  forest  fires  will  have  to  con- 
tinue. 

Proper  forestation  will  save  a  large  part  of  the  loss  at  a  very 
small  expense.  The  most  approved  plan  is  to  divide  the  forest 
into  sections  by  cutting  through  longitudinal  and  laternal  cross 
avenues  of  suitable  width,  from  which  the  timber  and  under- 
brush is  removed.  Thus  a  fire  in  one  section,  in  most  cases  dies 
out  on  reaching  an  avenue. 

A  suitable  patrol  with  telephonic  communication  should  be 
provided  and  in  some  sections  under  governmental  supervision 
this  is  being  done.  It  is  a  system  which  should  be  applied  to 
all  forests. 

Although  somewhat  beneath  the  dignity  of  the  regular  army 


WHAT  IS  CONSERVATION?  35 

in  the  United  States,  the  fighting  of  forest  fires  is  a  field  in 
which  the  army  can  be  made  of  the  greatest  usefulness. 

In  Germany  both  officers  and  men  equipped  with  picks,  shovels 
and  axes,  are  rushed  to  forest  fires  in  quick  order,  running  and 
walking  in  alternate  stretches  of  four  minutes  until  the  locality 
is  reached,  when  new  avenues  are  cut,  ditches  dug  and  fires 
beaten  out  in  the  underbrush.  Spectators,  also  are  pressed  into 
service,  and  the  spectator  who  does  not  lend  a  hand  when  or- 
dered to  do  so,  is  promptly  arrested. 

In  the  United  States,  the  calling  out  of  the  militia  has  not  as 
yet  been  done  to  fight  forest  fires,  but  it  will  certainly  come 
about.  The  regular  army  is  ordered  to  the  scenes  of  great  con- 
flagrations in  cities,  and  the  militia  as  well.  Their  presence  at 
forest  fires  is  just  as  necessary  and  desirable,  and  will  mean  sav- 
ings of  magnitude  great  enough  to  make  the  army  a  source  of 
profit  rather  than  a  burden.  In  the  Northwest  the  use  of  the 
regulars  in  fighting  fires  has  already  been  begun. 

Germany's  use  of  her  army  in  forest  fire  prevention  and 
fighting  probably  more  than  pays  the  whole  bill. 

Fire  fighters  in  the  forest,  however,  need  some  training  and 
drill.  During  a  fire  in  the  Northwest  in  1910,  having  no  re- 
sources to  fall  back  on,  Congress  was  asked  to  appropriate 
$100,000  to  purchase  powder  to  be  used  in  discharging  cannons 
to  make  rain.  The  money  was  not  forthcoming,  however,  and 
even  if  it  had  been,  it  would  have  been  largely  wasted,  since 
they  had  no  cannons  especially  adapted  for  the  precipitation  of 
rainfall. 

In  Switzerland,  great  skill  is  exercised  in  this  direction,  can- 
nons of  special  design  being  used,  which  when  discharged  at 
a  cloud,  will  produce  a  disturbance  of  air  over  a  large  area  and 
cause  the  desired  rainfall.  When  there  is  no  cloud,  however, 
no  rain  can  be  produced,  and  the  ordinary  cannon  is  of  little  or 
no  use.  The  Swiss  gunner  is  so  skillful  in  the  use  of  the  rain- 
making  cannons  that  he  can  direct  a  shower  over  a  particular 
field,  and  thus  prevent  it  falling  in  another  where  it  would  be 
wasted. 

A  little  study  of  forest  fire  prevention,  and  fewer  sham  battles 
would  be  very  desirable  for  the  militia,  as  well  as  for  the  regu- 
lars, and  the  boards  of  strategy  at  Washington  planning  imag- 
inary campaigns  which  can  never  take  place  might  profitably 
devote  some  time  to  forest  fire  tactics. 

We  see  the  spectacle  of  railroads  and  mining  companies  plant- 


36  THE  PRICE  OF  INEFFICIENCY 

ing  forests  for  supplying  ties  and  timbering,  when  at  the  same 
time  the  precautions  taken  to  preserve  the  forests  already  stand- 
ing are  so  totally  inadequate.  This  is  conservation  at  the  spigot 
and  waste  at  the  bunghole. 

For  each  1,000,000  acres  of  forest  in  public  ownership,  over 
4,000,000  are  privately  owned.  The  duty  of  the  government 
towards  its  own  forests  would  be  more  faithfully  performed  by 
the  repeal  of  the  present  timber  and  stone  act,  in  force  for  the 
last  thirty  years.  Under  it,  timber  worth  $300,000,000  has  been 
sold  for  about  $30,000,000  and  an  annual  yearly  loss  of  $25,- 
000,000  of  the  actual  value  of  the  timber  is  being  incurred. 

Another  example  of  destructive  legislation  is  in  the  laws  tax- 
ing forest  land.  Their  effect  is  to  prevent  reforestation.  "What 
this  amounts  to  is  shown  in  the  figures  of  re-growth  of  12  cubic 
feet  per  acre,  while  in  Germany  the  forests  yield  48  feet  an- 
nually per  acre. 

The  waste  of  timber  in  careless  cutting  and  handling  can  be 
greatly  reduced.  We  now  use  but  320  cubic  feet  of  lumber  for 
every  1000  feet  which  stood  in  the  forest. 

Our  extravagance  of  forests  is  shown  by  the  fact  that  not 
counting  the  loss  by  fire,  we  take  three  and  one-half  times  their 
yearly  growth  or  40  cubic  feet  per  annum  from  our  forests, 
which  amounts  to  260  cubic  feet  per  capita,  while  Germany 
uses  but  37  and  France  but  25  cubic  feet  per  capita.  In  wast- 
ing our  forests  thus  we  are  only  increasing  our  fire  bills  for  con- 
flagrations, for  the  fire  loss  abroad  is  only  one-tenth  of  our  own 
loss  per  capita. 

The  waste  in  forests,  while  enormous,  has  in  addition  a  cer- 
tain sentimental  interest,  which  attracts  comparatively  more 
attention  to  the  subject  than  is  given  to  waste  of  a  more  serious 
nature  in  other  fields. 

The  tree  in  the  forest  is  a  living  thing,  with  a  certain  individ- 
uality, and  its  wanton  destruction  excites  the  imagination,  while 
the  lump  of  ore  out  of  the  earth  has  no  such  appeal.  Yet  the 
annual  waste  in  the  treatment  of  the  ore  is  five  or  six  times  that 
of  forest  fires. 

According  to  the  report  of  the  National  Conservation  Com- 
mission, the  mincr-al  [)roduction  of  the  United  States  for  1907 
exceeded  $2,000,000,000  and  contributed  65%  of  the  total 
freight  traffic  of  the  country.  The  waste  in  the  extraction  and 
treatment  of  mineral  products  during  the  same  year  was  equiva- 
lent to  more  than  $300,000,000.     The  report  states : 


•WHAT  IS  CONSERVATION?  37 

"The  production  for  1907  included  395,000,000  tons  of  bitu- 
minous and  85,000,000  tons  of  anthracite  coal ;  166,000,000  bar- 
rels of  petroleum;  52,000,000  tons  of  iron  ore;  2,500,000  tons 
of  phosphate  rock  and  869,000,000  pounds  of  copper.  The 
values  of  other  mineral  products  during  the  same  year  included 
clay  products,  $162,000,000;  stone,  $71,000,000;  cement,  $56,- 
000,000;  natural  gas,  $53,000,000;  gold,  $90,000,000;  silver, 
$37,000,000;  lead,  $39,000,000;  and  zinc,  $26,000,000. 

''The  available  and  easily  accessible  supplies  of  coal  in  the 
United  States  aggregate  approximately  1,400,000,000  tons.  At 
the  present  increasing  rate  of  consumption,  this  supply  will  be 
so  depleted  as  to  approach  exhaustion  before  the  middle  of  the 
next  century. 

"The  kno^\^l  supply  of  high  grade  iron  ores  in  the  United 
States  approximates  4,788,150,000  tons,  which  at  the  present 
increasing  rate  of  consumption,  cannot  be  expected  to  last  be- 
yond the  middle  of  the  present  century.  In  addition  to  this, 
there  are  assumed  to  be  75,116,070,000  tons  of  lower  grade  iron 
ores  which  are  not  available  for  use  under  existing  conditions.  ^ 
"The  supply  of  stone,  clay,  cement,  lime,  sand  and  salt  is 
ample,  while  the  stock  of  the  precious  metals  and  of  copper, 
lead,  sulphur,  asphalt,  graphite,  quicksilver,  mica  and  the  rare 
metals  cannot  be  well  estimated.  But  it  is  clearly  exhaustible 
within  one  or  two  centuries  unless  unexpected  deposits  be  found. 
"The  known  supply  of  petroleum  is  estimated  at  15,000,000,- 
000  to  20,000,000,000  barrels,  distributed  through  six  separate 
fields,  having  an  aggregate  area  of  8,900  square  miles.  The  pro- 
duction is  rapidly  increasing,  while  the  waste  and  losses  through 
misuse  are  enormous.  The  supply  cannot  be  expected  to  last 
beyond  the  middle  of  the  present  century. 

"The  kno-vvn  natural  gas  fields  aggregate  an  area  of  9,000 
square  miles  distributed  through  22  states.  Of  the  total  yield, 
from  these  fields  during  1907,  400,000,000,000  cubic  feet,  valued 
at  $62,000,000,000  were  utilized  while  an  equal  quantity  was 
allowed  to  escape  into  the  air.  The  daily  waste  of  natural  gas, 
the  most  perfect  known  fuel,  is  over  1,000,000,000  cubic  feet,  or 
enough  to  supply  every  city  in  the  United  States  of  over  100,000 
population. 

"Phosphate  rock,  used  for  fertilizer,  represents  the  slow  ac- 
cumulation of  organized  matter  during  the  past  ages.  In  most 
countries  it  is  scrupulously  preserved;  in  this  country  it  is  ex- 
tensively exported,  and  largely  for  the  reason  that  its  produc- 


38  THE  PRICE  OF  INEFFICIENCY 

tion  is  increasing  rapidly.  The  original  supply  cannot  long 
withstand  the  increasing  demand." 

The  greater  part  of  the  enormous  losses  in  the  handling  of 
minerals  is  due  to  failure  to  utilize  the  proper  chemical  pro- 
cesses known  to  the  arts. 

The  report  of  the  Twelfth  Census  discloses  startling  condi- 
tions and  indicates  what  proper  utilization  of  the  chemical  dis- 
coveries now  known  would  mean : 

"Probably  no  science  has  done  so  much  as  chemistry  in  re- 
vealing the  hidden  possibilities  of  the  wastes  and  by-products 
in  manufactures.  This  science  has  been  the  most  fruitful  agent 
in  the  conservation  of  the  refuse  of  manufacturing  operations 
into  products  of  industrial  value.  Chemistry  is  the  intelligence 
department  of  industry. 

"The  measure  of  a  country's  appreciation  of  the  value  of 
chemistry  in  its  industrial  development  and  the  extent  to  which 
it  utilizes  this  science  in  its  industries,  generally  measure  quite 
accurately  to  the  industrial  progress  and  prosperity  of  that 
country.  In  no  other  country  in  the  world  has  the  value  of 
chemistry  to  industry  been  so  thoroughly  understood  and  appre- 
ciated as  in  Germany.  And  in  no  other  country  of  similar  size 
and  endowment  have  such  remarkable  advances  in  industrial 
development  been  recorded;  this,  too,  with  steadily  increasing 
economy  in  the  utilization  of  natural  resources. 

"In  ioOT  over  40,000,000  tons  of  coke,  valued  at  nearly  $112,- 
000,000,  were  produced  from  about  62,000,000  tons  of  coal. 
Only  5,500,000  tons  of  this,  or  about  less  than  14%,  was  ob- 
tained in  by-product  ovens.  About  54,500,000  tons  of  coal 
were  coked  in  bee-hive  ovens.  This  involved  a  waste  of  148,- 
000,000,000  cubic  feet  of  gas,  worth  $22,000,000;  540,000  tons 
of  ammonium  sulphate,  worth  a  similar  amount,  and  nearly 
400,000,000  gallons  of  tar,  worth  $9,000,000. 

"We  are  therefore  wasting  enough  power  to  establish  a  great 
manufacturing  center,  enough  ammonium  sulphate  to  fertilize 
thousands  of  acres,  enough  creosote  to  preserve  our  lumber,  and 
enough  pitch  and  tar  to  roof  our  houses  and  briquette  our  slag 
and  waste  coal.  Lignites  have  been  found  not  only  to  give  ex- 
cellent yield  of  gas,  but  also  tar,  oils,  paraffin  and  other  valuable 
by-products.  It  has  recently  been  claimed  that  one  ton  of  dried 
peat  can  be  made  to  yield  162  liters  of  pure  alcohol  and  about 
66  pounds  of  pure  ammonium  sulphate. 

"In  1907,  4,000,000  tons  of  coal  were  consumed  in  the  pro- 


WHAT  IS  CONSERVATION?  39 

duction  of  34,000,000,000  cubic  feet  of  coal  gas  for  heating  and 
illuminating,  worth  $36,000,000,  in  addition  to  over  100,000,- 
000,000  cubic  feet  of  water  and  oil  gas,  worth  $90,000,000 ;  of  all 
told  worth  $126,000,000. 

' '  No  accurate  estimate  can  be  made  as  to  the  total  unnecessary 
losses  in  connection  with  the  use  of  coal  for  different  purposes, 
but  lines  of  urgently  needed  investigation  are  indicated  by  the 
facts  that  the  vast  majority  of  power  plants  of  the  country  con- 
vert less  than  10%  of  the  heat  units  in  the  coal  into  actual 
work,  and  that  lighting  plants  convert  less  than  1%  of 
the  heat  value  of  the  coal  into  electric  light.  The  large  amount 
of  gases  from  blast  furnaces  are  being  used  to  a  small  but  an 
increasing  extent  in  the  development  of  gas-engine  power.  In 
the  coking  industry,  including  other  by-products,  the  waste 
totals  $55,000,000  a  year. 

"The  first  step  in  extending  our  fuel  supply  should  be  to 
lessen  the  waste  in  mining,  handling,  and  transportation  of  coal. 
There  are  equally  possible  great  savings  in  the  use  of  coal,  not 
only  in  the  prevention  of  waste  now"  recognized  as  such,  but  also 
in  discovering  means  of  avoiding  the  losses  involved  in  the 
transportation  of  heat  into  mechanical  energy,  and  this  into 
electric  energy  and  light. 

"Water  power  will  doubtless  prove  a  valuable  substitute  for 
coal  in  the  development  of  power  and  light  in  many  parts  of  the 
country,  and  the  use  of  the  heat  of  the  sun  and  of  alcohol  and 
other  organic  fuels  as  substitutes  for  coal  is  worthy  of  serious 
consideration  and  investigations. 

"In  European  countries  where  fuel  is  expensive,  10,000,000 
tons  of  peat  are  used  annually  for  fuel  purposes.  A  prelimi- 
nary and  incomplete  examination  of  the  peat  beds  of  the  country 
has  developed  the  fact  that  they  extend  over  an  area  of  11,000 
square  miles,  the  larger  part  of  which  is  distributed  through 
the  New  England  states.  New  York,  Minnesota,  Wisconsin,  New 
Jersey,  Virginia,  the  Carolinas  and  Florida, — states  wiiich  con- 
tain little  or  no  coal.  Extensive  deposits  are  also  found  in  a 
few  coal  producing  states — Iowa,  Illinois,  Indiana,  Ohio,  North 
Dakota  and  South  Dakota. 

"This  area  indicates  a  possible  production  of  13,000  millions 
of  tons  of  air  dried  peat  fuel.  At  $3  per  ton  in  the  air  dried 
form  (which  would  be  a  reasonable  price  for  fuel  in  the  states 
having  but  little  coal)  this  peat  would  have  a  fuel  value  of  $39,- 
000,000,000.     If  all  of  it  were  used  in  by-product  gas  producers, 


40  THE  PRICE  OF  INEFFICIENCY 

640,000,000  tons  of  ammonium  sulphate  could  be  manufactured 
as  a  by-product,  and  at  current  prices  this  would  be  worth  an 
aggregate  value  of  more  than  $36,000,000,000. 

"Recent  investigations  have  shown  that  much  American  peat 
when  dried  will  be  admirably  adapted  for  use  as  a  source  of 
producer  gas  for  charcoal,  for  certain  grades  of  coke,  for  the 
production  of  various  by-products,  for  illuminating  gas,  as  a 
filler  for  fertilizers,  in  the  manufacture  of  paper,  and  for  pack- 
ing material." 

The  vast  losses  which  may  thus  be  determined  in  forests,  min- 
erals and  coal,  have  a  counterpart  in  the  loss  to  the  country 
through  inefficient  agricultural  methods. 

The  American  farmer  allows  his  land  to  go  to  waste,  through 
erosion,  he  squanders  his  timber  and  impoverishes  the  fertility 
of  his  soil,  and  poverty  staring  him  in  the  face,  he  takes  refuge 
in  the  cities,  or  the  Canadian  northwest,  when  by  proper 
methods,  his  land  would  be  yielding  him  double  its  present  crops 
with  no  greater  labor  than  he  spends  now. 

After  the  factory  worker,  no  individual  receives  the  sympathy 
accorded  the  mortgage  burdened  farmer,  but  the  truth  is  that 
while  he  is  a  hardworking  fellow  he  is  a  fool.  A  little  more  use 
of  his  head  instead  of  his  hands  would  save  his  hands  and  the 
prosperity  of  the  country  as  well.  The  factory  worker  has  the 
ignorant  excuse  that  added  work  on  his  part  would  principally 
benefit  his  employer,  but  the  farmer  being  his  own  employer  has 
not  even  that  excuse  to  offer,  for  every  stroke  he  does  is  for  his 
own  benefit. 

The  average  yield  of  wheat  in  the  United  States  is  less  than 
14  bushels  per  acre,  in  Germany  it  is  28  bushels  and  in  England 
32  bushels.  We  get  30  bushels  of  oats  per  acre,  England  nearly 
45  and  Germany  more  than  47.  Our  soils  are  fertile  but  our 
modes  of  farming  neither  conserve  the  soil  nor  secure  full  crop 
returns.  Soil  fertility  need  not  be  diminished,  but  may  be  in- 
creased. The  large  yields  now  obtained  from  farms  in  Europe, 
which  have  been  cultivated  for  a  thousand  years,  prove  this  con- 
clusively. Proper  management  will  double  our  average  yield 
per  acre.  The  United  States  can  grow  the  farm  products 
needed  by  a  population  more  than  three  times  as  great  as  our 
country  now  contains,  provided  the  waste  land  is  utilized.  The 
area  of  land  for  cultivation  may  almost  be  doubled. 

In  addition  to  land  awaiting  the  plow,  75,000,000  acres  of 
swamp  land  can  be  reclaimed,  40,000,000  acres  of  desert  land 


WHAT  IS  CONSERVATION?  41 

irrigated,  and  millions  of  acres  of  brush  and  wooded  land 
cleared.  Our  population  will  increase  continuously,  but  as  there 
is  a  definite  limit  to  the  increase  of  our  cultivated  acreage,  we 
must  greatly  increase  the  yield  per  acre.  The  American  farmer, 
more  than  anyone,  must  give  ear  to  the  call  for  efficiency. 

The  greatest  unnecessary  loss  of  our  soil  is  preventable 
erosion.  Second  only  to  this  is  the  waste,  non-use  and  misuse 
of  fertilizer  derived  from  animals  and  men. 

The  losses  to  farm  products  due  to  injurious  mammals  is 
estimated  at  $130,000,000  annually;  the  loss  through  plant  dis- 
eases reaches  several  hundred  million  dollars;  and  the  loss 
through  insects  is  reckoned  at  $659,000,000.  The  damage  by 
birds  is  balanced  by  their  beneficent  work  in  destroying  noxious 
insects.  Losses  due  to  the  elements  are  large,  but  no  estimate 
has  been  made  of  them. 

Losses  to  live  stock  from  these  causes  are  diminishing  because 
of  protection  and  feeding  during  the  winter.  The  annual  losses 
from  disease  among  the  domestic  animals  are:  horses  1.8%, 
cattle  2%,  sheep  2.2%  and  swine  5.1%.  Most  of  these  farm 
losses  are  preventable. 

A  noticeable  chain  of  losses  is  seen  in  considering  the  subject 
of  conservation.  The  waste  of  forests  is  largely  the  cause  of 
floods  and  freshets  and  soil  erosion,  the  latter  producing  one  of 
the  great  wastes  of  argiculture. 

The  wastes  of  forests  and  the  selling  of  wood  at  the  cost  of 
getting  it  to  market  instead  of  the  added  price  of  its  replace- 
ment, causes  frame  houses  to  be  built  in  great  numbers,  and  the 
fire  loss  on  this  account  with  the  added  cost  of  fire  departments 
and  water  supplies  in  cities  over  the  normal  requirements  is 
another  link  in  the  costly  chain  of  inefficiency. 

The  floods,  which  would  not  be  so  considerable  were  the 
forests  properly  conserved,  involve  great  losses  and  make  more 
difficult  the  utilization  of  water  powers,  since  the  water  comes 
at  a  single  short  season  instead  of  being  more  generally  distrib- 
uted. 

The  forest  tree  is  one  of  the  best  friends  of  mankind;  and 
it  deserves  mankind's  most  grateful  treatment. 

The  waste  of  our  water  powers  is  little  understood.  It  may 
best  be  indicated  by  a  quotation  for  the  author 's  work,  ' '  Hydro- 
electric Developments  &  Engineering." 

"Nearly  every  state  in  the  Union  has  large  water  powers 
available.     It  has  been  estimated  that  the  upper  Mississippi  and 


42  THE  PRICE  OF  INEFFICIENCY 

its  tributaries  have  an  available  water  power  of  about  2,000,000 
horse  power;  that  of  the  Southern  Appalachin  region,  about 
3,000,000  and  that  of  the  state  of  Washington  alone,  about 
3,000,000  horse  power. 

"According  to  estimates  made  by  the  United  States  Geological 
Survey,  there  is  a  minimum  of  about  2,800,000  horsepower 
developed  by  the  rivers  in  the  Southern  Appalachin  Mountains. 
Mature  consideration  of  the  conditions  leads  to  the  estimate  that 
at  least  50%  and  probably  much  more  of  this  indicated  horse- 
power is  available  for  economic  development.  If  auxiliary 
power  were  provided,  it  would  be  profitable  to  develop  up  to 
2.5  times  this  amount. 

"Full  development  of  storage  facilities  would  increase  the 
minimum  from  twenty  to  thirty  times.  Obviously  an  estimate  of 
present  value  based  on  50%  of  the  minimum  horsepower  is  sure 
to  be  extremely  conservative.  The  rental  of  1,400,000  horse- 
power at  $20  per  horsepower  per  year,  would  amount  to  an 
annual  return  of  $28,000,000.  This  amount  is  equal  to  a  gross 
income  of  3%  on  a  capital  of  about  $933,000,000.  Some  of  thia 
power  has  already  been  developed,  but  a  very  small  proportion 
— hardly  enough  to  make  any  appreciable  showing  when  the 
enormous  resources  of  the  region  are  taken  into  account. 

"It  has  been  estimated  that  in  the  United  States  more  than 
30,000,000  horsepower  are  available,  and  under  certain  assump- 
tions as  to  storage  reservoirs,  this  amount  can  be  increased  to 
150,000,000  horsepower  or  possibly  more. 

"Using  the  smaller  figure  of  30,000,000  horsepower  as  an 
illustration ;  to  develop  an  equal  amount  of  energy  in  our  most 
modern  steam  electric  plants  would  require  the  burning  of 
nearly  225,000,000  tons  of  coal  per  annum,  and  in  the  average 
steam  engine  plant,  as  now  existing,  more  than  600,000,000  tons 
of  coal,  or  50%  in  excess  of  the  total  coal  production  of  the 
country  in  1906.  At  the  average  price  of  $3  per  ton,  it  would 
require  the  consumption  of  coal  costing  $1,800,000,000  to  pro- 
duce an  equivalent  power  in  steam  plants  of  the  present  general 
type. 

"Of  this  immense  power  available,  only  a  small  percentage  is 
developed,  estimated  to  be  about  3,000,000  horsepower." 

The  practical  utility  of  streams  for  both  navigation  and 
power  is  measured  by  the  effective  low  water  stage.  The  vol- 
ume carried  when  the  streams  rise  above  this  stage  is  largely 
wasted  and  often  does  serious  damage.     The  direct  yearly  dam- 


WHAT  IS  CONSERVATION?  43 

age  by  floods  since  1900  has  increased  steadily  from  $45,000,000 
to  over  $238,000,000.  The  indirect  loss  through  depreciation 
of  property  is  great  while  a  large  loss  rises  in  impeded  traffic 
through  navigation  and  terminal  transfers. 

The  freshets  are  attended  by  destructive  soil  erosion.  The 
soil  matter  annually  carried  into  lower  rivers  and  harbors  or 
into  the  sea  is  computed  at  783,000,000  tons.  Soil  wash  reduces 
by  10  or  20  per  cent,  the  productivity  of  upland  farms  and  in- 
creases channel  cutting  and  bar  building  in  the  rivers.  The 
annual  loss  to  the  farmers  alone  is  fully  $500,000,000  and  large 
losses  follow  the  fouling  of  the  waters  and  the  diminished  navi- 
gability of  the  streams. 

Through  imperfect  control  of  the  running  waters,  lowlands 
are  temporarily  or  permanently  flooded.  It  is  estimated  that 
there  are  in  the  mainland  of  the  United  States  about  75,000,000 
acres  of  overflow  and  swamp  lands  requiring  drainage;  that  by 
systematic  operation  these  can  be  drained  at  moderate  cost,  and 
that  then  they  would  be  worth  two  or  three  times  the  present 
value  and  cost  of  drainage,  and  would  furnish  homes  for  10,- 
000,000  people. 


CHAPTER  y 
CONSERVATION  OF  HIBIAN  LIFE 

Xational  criminal  negligence — Division  of  responsibility  and  its  terrible 
consequences — The  death  toll  of  transportation — The  evil  genius  of  the 
Xew  York  transportation  interests — The  demands  of  industry — 8,531 
killed  and  102,075  injured — The  frightful  tragedies  of  the  coal  mines — 
The  blight  of  white  lead — Governmental  inefficiency  chargeable  with, 
the  greater  part  of  the  loss — The  white  plague — ^Undermining  the  health 
of  the  worker — The  death  chambers  of  the  poor — Factory  sanitation — 
The  proper  protection  of  the  worker  is  the  duty  of  the  state — The 
factory,  the  symbol  of  modern  progress. 

Inefficiency,  in  addition  to  its  direct  losses,  is  chargeable 
^^"itll  a  vast  account  of  poverty,  misery  and  WTong.  Criminal 
negligence  is  punishable  by  law,  but  the  line  between  negligence 
and  inefficiency,  as  little  as  the  two  may  at  first  glance  seem 
connected,  is  a  narrow  one,  and  the  inefficiency  of  to-day  has 
terrible  results  in  the  work  of  to-morrow. 

Division  of  responsibility  is  the  mother  of  inefficiency,  and 
any  degree  of  efficiency  is  likely  to  continue  in  force  if  the 
responsible  man  cannot  be  definitely  located. 

If  this  were  not  the  case,  there  would  be  an  instant  reduction 
in  the  wholesale  slaughter  of  human  beings  by  the  railroads  and 
in  the  industries,  and  the  vast  amount  of  preventable  injuries, 
poisoning  and  disease  which  levy  their  hourly  toll  all  over  the 
country. 

In  the  daily  battle  of  transporting  itself  about  the  city  of  New 
York,  the  population  of  the  city  is  reduced  by  350  killed  and 
2,700  injured  every  year.  That  is,  of  those  who  start  out  to 
ride  on  any  given  day,  one  will  never  return  and  seven  will  be 
brought  back  injured,  the  price  of  inefficient  transportation. 

The  cost  to  the  transportation  companies  amounts  to  about 
$2,500,000  in  damages  and  $1,000,000  in  legal  expenses,  while 
to  the  public  the  cost  is  vastly  greater,  since  of  the  damages 
they  receive,  at  least  half  is  consumed  in  legal  expenses,  while 
the  amount  recovered  amounts,  in  no  case,  to  a  very  large  pro- 
portion of  the  actual  loss. 

44 


CONSERVATION  OF  HUIMAN  LIFE  45 

The  inefficiency  in  preventing  accidents  and  the  inefficiency 
of  the  method  of  adjusting  damages  thus  fastens  itself  on  the 
public  in  the  shape  of  heavy  loss  of  life  and  limb ;  a  loss  which 
on  the  part  of  the  companies  amounts  to  9%  of  their 
running  expenses.  The  maintenance  of  a  vaste  horde  of  law- 
yers, who  otherwise  would  be  engaged  in  useful  occupations,  is 
another  great  drain.  In  Germany,  there  is  only  the  recovery 
of  pensions  and  seldom  a  lump  sum,  and  the  fees  of  the  lawyers 
are  properly  regulated,  so  that  there  is  not  the  tremendous 
prize  offered  to  the  encouragement  of  litigation  which  is  hung 
up  almost  without  exception  by  the  American  sj'stem  of  lump 
sum  damages. 

The  historj'  of  the  street  railways  of  New  York  is  one  of  the 
blackest  chapters  that  was  ever  written  in  the  pages  of  civic 
development.  It  is  from  the  beginning  a  story  of  criminal 
bribery  for  franchises,  stock  market  manipulation  and  stripping 
of  investors,  robbery  of  the  companies  by  their  officers  through 
false  bookkeeping,  treacherous  struggles  between  companies, 
outrageous  treatment  of  passengers  in  transit  and  in  ease  of 
damage  suits,  long  delays,  perjurj^  intimidation  of  witnesses 
and  every  form  of  trick  and  deceit  that  may  be  devised.  Law- 
yers, even,  who  have  honestly  won  cases,  have  had  their  witnesses 
bought  over  later  and  have  been  disbarred  on  charges  of  cor- 
ruption of  which  they  were  never  guilty.  The  e\'il  genius  which 
presides  over  the  transportation  interests  of  New  York  has  had 
few  parallels  in  any  industry,  and  conditions  to-day  are  aU  that 
might  be  expected  of  such  a  histon,^ 

The  political  activity  of  the  rival  financial  interests  in  the 
New  York  transportation  field,  the  desperate  expedients  of 
the  two  parties  and  the  network  of  undergi-ound  interests,  make 
the  subject,  though  veiled,  one  of  the  most  menacing  in  Ameri- 
can life  to-day.  Its  ramifications  are  wide-spread  and  danger- 
ous and  it  is  like  a  cancer,  attacking  the  political  vitality  of  the 
state,  for  neither  party  escapes  its  influence  and  the  voters  have 
no  means  of  expressing  themselves  on  the  subject,  for  however 
they  vote,  the  taint  will  be  found  in  the  councils  of  the  victors. 
This  three  cornered  struggle  between  rival  groups  of  capital  and 
decent  government  is  an  outrage  on  the  public  and  were  our 
political  system  such  that  it  could  effectively  reach  the  situa- 
tion, unmistakeable  retribution  would  follow. 

America,  however,  is  cursed  with  an  antiquated  and  theoreti- 
cal political  sj'stem  whereby  no  question  can  ever  be  decided  on 


46  THE  PEICE  OF  INEFFICIENCY 

its  own  merits,  as  it  can  be  in  European  governments  through 
changes  in  ministries,  and  the  public  is  thus  left  in  helpless  con- 
fusion, while  unspeakable  conditions  continue.  At  every  elec- 
tion, by  devices  of  politicians,  no  matter  what  issue  a  party 
may  be  committed  to,  it  always  stands  for  other  issues,  and  the 
total  result  is  that  the  elected  party  does  not  know  whether  it 
was  elected  on  one  issue  or  another,  and  thus  is  free  to  proceed 
as  interest  and  not  as  public  welfare  may  dictate. 

The  situation  in  New  York  is  duplicated  in  more  or  less  mag- 
nitude all  over  the  country,  both  in  a  political  sense  and  in  the 
inefficiency  of  operation. 

Due  to  carelessness  of  employees,  faulty  methods  of  operation, 
poor  equipment,  disregard  of  proper  safety  appliances,  careless- 
ness of  the  public  itself,  negligence  from  beginning  to  end  of 
all  concerned  and  the  final  negligence  of  the  public  to  place 
responsibility;  the  harvest  of  death,  disaster  and  misery,  the 
burdens  of  sickness  and  the  suiferings  of  those  bereft  and  in- 
jured continue. 

In  railroad  transportation  the  situation  is  even  more  appalling. 
In  1910,  8,531  were  killed  and  102.075  injured,  a  total  ranking 
with  the  great  battles  of  history. 

An  important  addition  to  the  casualties  is  the  great  number 
killed  while  trespassing  on  railroads,  which  has  amounted  to 
50,000  killed  and  55,000  injured  in  the  past  eleven  years.  This 
includes  not  only  tramps,  but  laborers,  and  their  wives  and  chil- 
dren and  others  who  use  the  tracks  as  thoroughfares  in  violation 
of  the  rights  of  the  roads,  a  practice  but  little  censured  by  the 
law.  A  more  rigid  enforcement  of  statutes  on  the  subject,  not 
so  much  in  severity  of  punishment  as  in  certainty  of  punish- 
ment, is  highly  desirable. 

In  mining,  an  exceptionally  hazardous  occuption,  the  losses 
have  been  as  follows : 

For  the  20  year  period  ending  1908,  an  aggregate  of  9,422,902 
persons  employed  in  coal  mining  were  exposed  to  risk  of  death, 
an  annual  average  of  471,145.  Among  this  number  there  oc- 
curred, as  far  as  officially  reported,  29,293  fatal  accidents  or  an 
average  of  1,465  per  annum,  resulting  in  a  death  rate  of  3.11 
per  1,000.  If  the  decade  ending  with  1906  is  separately  con- 
sidered, it  appears  that  the  average  fatality  rate  was  3.13  per 
1,000,  which  compares  with  the  corresponding  rates  for  the 
principal  coal  mining  countries  of  the  world  most  unfavor- 
ablv. 


CONSERVATION  OF  HU]MAN  LIFE  47 

Comparison  of  Fatal-Accident  Rates  in  Coal  Mining  Coxmtries  for  the 
Period  1897  to  1906, 

Total  number  Fatal  Accidents 
of  employees  Eate  per 
CouxTBY                                               at  work  one  Xumber  1000  em- 
year  ployees 

North  America 5,179,343  16,273  3.13 

Japan     ( 1902-1906)     438,259  l!355  3.09 

Russia,  Finland    (1901-1903)    330,147  805  2.44 

Victoria     7,902  18  2.28 

New  South  Wales   124,940  267  2.14 

Prussia    4,389,174  9,327  2.13 

France    1,629,177  2,944  1.81 

Xew   Zealand    27,268  37  1.36 

Austria    1,186.510  1,599  1.35 

United  Kingdom    7,973,031  10,319  1.29 

Queensland    11,714  14  1.20 

Belgium      1,322.516  1.401  1.06 

India   (1808-1906)    790,070  676  86 

It  Tvill  be  seen  from  this  comparison  that  the  risk  of  fatal 
accident  in  the  coal  mines  of  North  America  is  decidedly  more 
serious  than  in  any  part  of  any  other  coal  field  in  the  world. 
Considering  the  constant  growth  of  the  mining  industry,  on  this 
continent,  an  increase  measured  by  an  enhanced  output  in  the 
United  States  alone  from  253,741.192  tons  in  1899  to  115.842,698 
tons  in  1908  or  64%,  the  excess  in  the  mining  fatality  is 
plainly  a  matter  of  most  serious  national  concern. 

The  accident  rate  for  the  North  American  coal  mines  has' 
gradually  increased  from  an  average  of  2.66  per  1,000  during 
the  first  five  years  of  the  20  year  period  to  an  average  of  3.58 
per  1,000  during  the  last. 

The  fluctuations  in  the  rates  from  year  to  year  are  quite  con- 
siderable. The  maximum  was  attained  in  1907  when  the  rate 
reached  4.15  per  1.000  against  a  minimum  in  1897  of  2.32. 

The  true  elements  of  risk  of  coal  mining  in  North  America 
are  not,  however,  fully  disclosed  by  the  returns  for  the  coal 
fields  as  a  whole.  ]\Iore  startling  conditions  exist,  if  particular 
areas  are  considered,  for  in  these  the  hazards  are  much  greater, 
so  that  if  they  were  reduced  to  the  general  level  the  rate  would 
fall  quickly. 

The  Xew  York  Times  of  Sept.  17.  1911,  states,  in  referring 
to  the  mining  industry,  including  metal  as  well  as  coal  mines: 

''Thirty  thousand  miners  killed  in  the  United  States  in  the 
last  ten  years. 


48  THE  PRICE  OF  INEFFICIENCY 

"Seventy-five  thousand  miners  injured,  many  of  them  maimed 
for  life,  in  the  same  period. 

"Eleven  thousand  widows  made  by  the  deaths  of  the  miners. 

"Thirty  thousand  children  left  fatherless. 

"It  is  the  story  of  the  tragedy  of  the  mines,  but  not  the  whole 
story.  If  the  mines  of  the  United  States  during  the  ten  years 
had  had  the  same  standards  of  safety  as  in  European  countries; 
if  the  United  States  had  killed  two  in  every  thousand  employed, 
instead  of  three,  four  or  five,  15,000  of  the  30,000  of  the  Ameri- 
can miners  killed  might  be  living  to-day;  40,000  out  of  the  75,- 
000  injured  might  have  escaped  injury;  5,500  widows  might  not 
have  been  widows,  and  15,000  orphan  children  might  still  have 
fathers. ' ' 

In  addition  to  the  vast  totals  of  accidents  of  a  sanguinary 
nature,  there  is  an  enormous  loss  through  poisoning  and  con- 
sequent loss  and  shortening  of  the  lives  of  those  engaged  in  cer- 
tain occupations. 

Among  them  is  the  lead  industry,  concerning  which  Paul  P. 
Pierce  in  the  North  American  Review  of  October,  1911,  in  an 
article  entitled  "Industrial  Diseases"  states: 

"Lead  poisoning  was  made  the  chief  objective  of  the  Illinois 
Commission  on  Occupational  Diseases.  They  discovered  in  that 
state,  twenty-eight  industries  in  which  this  form  of  poisoning 
is  a  factor;  but  the  great  majority  of  cases  were  chargeable  to 
five  industries,  viz :  white-lead  manufacturing,  lead  smelting  and 
refining,  making  storage  batteries,  making  dry  colors  and  paints, 
and  the  painters'  trade.  The  last  was  found  to  be  numerically 
the  most  important  lead  trade  in  the  state  of  Illinois,  employ- 
ing probably  30,000  men.  Its  workers  acquire  lead  poisoning 
for  the  most  part  through  chewing  lead  smeared  tobacco,  eating 
lead  smeared  food,  breathing  dry  lead  dust,  mixing  dry  white  or 
yellow  lead  with  putty  or  paint,  and  especially  sand  papering 
coats  of  lead  paint  after  they  are  dry.  The  hazard  of  this  oc- 
cupation might  be  greatly  diminished,  it  is  believed,  by  greater 
care  on  the  part  of  the  painters;  by  provision  of  wash  rooms  in 
which  they  may  wash  their  hands,  change  their  clothes  and  eat 
their  lunches,  as  in  Germany ;  by  abolishing  the  use  of  white 
lead  paint,  as  in  France,  or  using  it  only  for  exterior  work,  and 
doing  away  with  dry  sand  pafxTiiig  of  lead  paint,  as  in  Eng- 
land. Indeed,  it  is  coutt-ndcd  that  the  lead  trades  in  general 
are  the  more  dangerous  here  than  iu  England  or  in  Germany, 


CONSERVATION  OF  HU]\IAN  LIFE  49 

Their  evils,  it  is  true,  tend  to  lessen  with  the  substitution  of 
machinery  for  hand  work  with  other  alleviation  of  conditions; 
but  the  improvements  in  the  care  of  the  men  do  not  keep  pace 
with  improvements  in  mechanical  processes. 

"In  the  absence  of  adequate  statistics  and  research,  the  actual 
amount  of  sickness  and  death  among  the  industrial  population 
must  be  a  matter  of  "scientific  conjecture."  With  German 
sickness  insurance  as  a  basis  Dr.  F.  K.  Hoffman  of  the  Pruden- 
tial Life  Insurance  Company  has  attempted  an  estimate  of  the 
amount  and  cost  of  sickness  among  our  industrial  workers  in 
1910,  Placing  the  number  of  persons  gainfully  employed  at 
33,500,000  and  assuming  the  same  sickness  rate  as  is  found  in 
Germany,  he  finds  that  the  number  of  cases  of  sickness  among 
these  workers  last  year  must  have  been  13,400,000;  the  aggre- 
gate number  of  days  of  sickness  284,750,000;  the  loss  of  wages 
not  less  than  $366,107,145;  the  medical  cost  284,750,000;  the 
loss  through  change  of  workers  in  industry  on  account  of  sick- 
ness, $122,035,715,  making  a  total  economic  loss  among  the  in- 
dustrial classes  of  $772,892,860  for  the  year.  Of  this  total, 
German  experience  indicates  that  no  less  than  one-fourth  is  due 
to  preventable  causes,  a  needless  loss  of  $193,223,215.  In  fact, 
it  is  thought  that  the  sickness  rate  here  is  somewhat  higher  than 
in  Germany,  and  consequently  that  the  above  estimates  are 
too  low.  Moreover,  these  figures  take  no  account  of  permanent 
invalidity,  and  excessive  mortality  involved  in  present  indus- 
trial conditions;  and  Dr.  Hoffman  places  the  number  of  deaths 
among  American  wage-earners  last  year  at  330,500  of  which  no 
less  than  one-fourth  were  clearly  preventable.  Nor  do  any  of 
these  figures  take  account  of  the  handicap  which  industrial  dis- 
ease and  premature  death  imposes  upon  the  posterity  of  the 
worker. ' ' 

All  this  tremendous  waste  is  largely  chargeable  to  govern- 
mental inefficiency.  It  should  be  the  duty  of  those  in  office  to 
forecast  conditions  of  this  kind  of  their  own  initiative.  The 
office  holder,  theoretically  the  representative  of  the  people,  is 
too  prone  to  remain  inactive  and  do  nothing  that  he  is  not  com- 
pelled to  do  by  reason  of  pressure  of  public  opinion.  He  is  by 
no  means  an  initiator;  indeed  almost  all  reforms  are  brought 
about  by  the  cowardice  of  the  people's  representatives. 

Vigorous  committees  of  active  reformers  initiate  almost  all 
laws,  which  are  only  passed  when  the  legislator  fears  longer  to 


50  THE  PRICE  OF  INEFFICIENCY 

disregard  the  public  opinion  which  he  thinks  they  represent. 
A  system  of  government  producing  such  legislators  is  primarily 
at  fault  and  should  be  changed. 

Counting  it  up  in  dollars  and  cents,  the  Department  of  Com- 
merce and  Labor  shows  the  losses  due  to  tuberculosis,  a  largely 
preventable  disease,  the  principal  steps  in  the  prevention  of 
which  should  be  taken  by  the  legislators  of  the  various  states.^ 

"The  average  length  of  human  life  in  different  countries 
varies  from  less  than  twenty-five  to  more  than  fifty  years.  This 
span  of  life  is  increasing  wherever  sanitary  science  and  pre- 
venting medicine  is  applied.     It  may  be  greatly  extended. 

"Our  annual  mortality  from  tuberculosis  is  about  150,000. 
Stopping  three-fourths  of  the  loss  of  life  from  this  cause,  and 
from  typhoid  and  other  prevalent  and  preventable  diseases 
would  increase  our  average  length  of  life  over  fifteen  years. 

"There  are  constantly  about  3,000,000  persons  seriously  ill 
in  the  United  States,  of  whom  500,000  are  consumptives.  More 
than  half  of  this  illness  is  preventable. 

"If  we  count  the  value  of  each  life  lost  as  only  $1,700  and 
reckon  the  average  earnings  lost  by  illness  at  $700  per  year  for 
grown  men,  we  find  that  the  economic  gain  from  mitigation  of 
preventable  diseases  in  the  United  States  would  exceed  $1,500,- 
000,000  a  year.  In  addition  we  would  decrease  suffering  and 
increase  happiness  and  contentment  among  the  people.  ^  This 
gain,  or  the  lengthening  and  strengthening  of  life  which  it 
measures,  can  be  secured  through  medical  investigation  and 
practice,  school  and  factory  hygiene,  restriction  of  labor  by 
women  and  children,  the  education  of  the  people,  in  both  public 
and  private  hygiene,  and  through  improving  the  efficiency  of 
our  health  service,  municipal,  state  and  national." 

On  the  subject  of  factory  sanitation  and  labor  protection,  the 
Department  of  Commerce  and  Labor  says  further: 

"The  welfare  of  the  laboring  class  has  always  been  a  subject 
of  the  greatest  importance  and  most  far  reaching  influence 
socially  and  politically.  The  miserable  hygienic  conditions  ex- 
isting in  the  working  places  of  some  industries,  for  example,  are 
unjust  to  the  working  classes,  and  sometimes  react  with  fright- 
ful results  upon  the  public.  The  aspirations  of  the  working 
classes  to  improve  their  condition  in  respect  to  sanitation  is  not 
only  perfectly  justifiahle,  but  by  all  means  should  be  encouraged. 
With  the  nudtiplieation  of  factories,  the  improvement  in  the  lot 
of  the  working  man  has  become  a  vital  question  of  the  day.     Sta- 


CONSERVATION  OF  HUMAN  LIFE  51 

tistics  and  clear  thinking  convince  him  of  the  dangers  to  which 
he  is  exposed  by  the  conditions  of  his  employment. 

"Under  the  influence  of  long  continued  work  under  unsani- 
tary conditions,  the  physiques  of  the  workmen,  and  especially 
those  employed  in  factories,  often  show  more  or  less  character- 
istic marks.  The  height  is  usually  below  the  medium,  the 
body,  thin  and  weak,  is  poorly  nourished  and  of  sickly  paleness. 
This  condition  is  called  lymphatic  or  anaemic.  The  spiritual 
and  moral  life  may  likewise  become  inactive  and  apathetic.  Even 
the  strongest  factory  workers  under  such  conditions  become 
more  or  less  exhausted  before  they  reach  55  or  60  years  of  age. 
Often  they  are  completely  wasted  and  utterl}^  unfit  for  work  at 
that  age.  Many  of  those  who  work  in  spinning  mills,  cloth- 
printing  establishments,  and  in  general  plants  where  there  is 
a  high  temperature  and  lack  of  pure  air  are  cut  off  prematurely. 

"Women  suffer  even  more  than  men  from  the  stress  of  such 
circumstances,  and  more  readily  degenerate.  A  woman's  body 
is  unable  to  withstand  strains,  fatigues  and  privations  as  well 
as  a  man's.  This  makes  her  condition  all  the  worse  because 
her  wages  are  correspondingly  smaller.  The  diseases  which 
most  frequently  afflict  the  worls:ing  class  are  a  disturbance  of 
the  nutritive  and  blood-making  processes.  AVeavers,  spinners, 
and  workmen  employed  in  branches  of  industry,  where  work  is 
done  in  close,  poorly  ventilated  cold  or  hot  rooms,  are  especialty 
subject  to  these  diseases. 

"Among  the  diseases  which  the  workmen  of  this  class  are 
subjected  to  most  often  are  the  so-called  inanition,  scrofula, 
rachitis,  pulmonary  consumption,  dropsy,  also  rheumatic  trou- 
bles, pleurisy,  typhoid  fever,  gangrene,  and  the  various  skin 
diseases. 

"Every  epidemic,  be  it  typhoid,  smallpox,  scarlet  fever,  dys- 
entery, cholera,  etc.,  draws  its  great  army  from  this  class.  For 
every  death  that  occurs  among  the  richer  and  higher  classes, 
there  are  many  in  the  working  class.  It  is  the  workman  en- 
gaged in  unhealthy  factories  first  of  all  who  fill  the  hospitals 
and  their  death  chambers.  Again  it  is  more  often  the  working 
woman  who  suffers  from  female  troubles,  and  even  cancer.  The 
reasons  for  the  high  mortality  and  shortness  of  life  among  the 
working  class  can  easily  be  perceived  from  the  foregoing  facts. 
These  two  evils  are  always  proportionate  to  the  danger  and  the 
unsanitary  conditions  existing  in  the  industry. 

"Loss  of  health  and  shortening  of  life  are  looked  upon  as 


52  THE  PRICE  OF  INEFFICIENCY 

the  severest  of  evils  that  can  be  inflicted  upon  the  individual. 
The  working  classes  themselves  often  call  their  condition  white 
slavery,  and  their  factories  and  workshops  slaughter-houses. 

''All  the  harmful  influences  which  affect  the  workingman  in 
his  various  callings  must  therefore  be  thoroughly  studied  and 
earnest  effort  made  toward  their  amelioration  or  removal,  not 
only  that  the  interests  and  health  of  the  weaker  members  of  so- 
ciety may  be  protected,  but  also  because  the  health  of  society  in 
general  is  both  directly  and  indirectly  menaced  by  unsanitary 
conditions  in  any  industry. 

"When  we  go  back  to  those  causes  to  which  the  nations  of 
the  present  day  owe  their  advance  in  culture  and  social  condi- 
tions, we  find  that  one  of  the  most  important  and  essential 
causes  of  this  most  desirable  advance  lies  in  the  deeper  recog- 
nition of  those  natural  conditions  upon  which  depend  the  life 
and  well-being  of  the  individual  and  the  prosperous  develop- 
ment of  society. 

"The  sciences  alone  would  have  added  but  little  if  any  real 
elevation  of  the  general  conditions  of  well-being.  Science,  at 
times,  had  to  descend  from  its  lofty  regions  to  meet  the  neces- 
sary demands  of  daily  life.  It  had  to  make  the  laws  and  needs 
of  human  existence  the  object  of  its  most  comprehensive  re- 
searches. It  had  to  bring  to  light  their  relation  to  and  connec- 
tion with  the  external  conditions  of  life.  It  is  only  by  means 
of  these  that  more  rational  rules  of  life  can  be  formulated.  It 
is  in  the  manifold  transgressions  of  these  laws,  in  the  unreason- 
able gratifications  of  certain  needs,  in  the  almost  criminal  ig- 
norance and  disregard  of  the  injurious  influences,  that  the  causes 
and  sources  of  many  evils  are  to  be  found.  Such  evils  are 
especially  prevalent  in  the  conditions  which  surround  industrial 
establishments  and  their  workers. 

' '  To  understand  the  evils  which  threaten  the  industrial  classes 
and  to  search  for  their  remedy,  is  one  of  the  pressing  needs  of 
the  day.  To  obtain  the  correct  point  of  view  for  the  solution 
of  these  important  questions,  an  unprejudiced  and  searching 
investigation  is  first  of  all  necessary. 

"The  attention  of  foreign  countries  has  been  for  a  long  time 
directed  to  the  economic  traits  which  aim  at  the  improvement 
and  extension  of  the  methods  of  production.  Nothing  is  neg- 
lected whieli  may  protect  and  raise  the  interests  of  industry. 
But  hitherto  too  little  attention  has  been  given  to  those  unsani- 
tary factory  conditions  Avhich  imperil  the  lives  and  health  of 


CONSERVATION  OF  HUMAN  LIFE  53 

the  worker.  These  conditions  have  risen  largely  as  the  result 
of  the  increasing  population  in  manufacturing  to^^'Tls  and  they 
affect  not  only  the  workingman,  hut  also  the  manufacturers  of 
the  whole  nation. 

**The  present  concentration  of  population  in  large  manu- 
facturing cities  is  not  in  the  interest  of  public  hygienic  and 
economic  principles  in  such  a  measure  as  might  easily  he  as- 
sumed. The  characteristic  increase  in  the  industries  in  Ameri- 
can cities  is  nothing  if  not  remarkable.  The  factory  is  the 
symbol  of  the  day,  and  steam  and  electricity  are  the  rulers  of 
the  present.  Our  age  has  learned  to  utilize  the  forces  of  nature 
and  thus  has  made  gigantic  strides  forward.  The  more  atten- 
tion is  paid  to  the  improvement  of  the  conditions  of  health  of 
the  working  class,  the  more  surely  will  those  favorable  results 
be  obtained  for  which  the  American  strives. 

"The  successful  development  of  factory  sanitation  and  the 
protection  of  the  workers  in  factories  require: 

"1.  Systeniatic  education  in  respect  to  the  many  dangers 
which,  in  certain  industries,  threaten  the  worlcman  and  the 
public. 

"2.  The  institution  of  technical  preventative  measures  based 
upon  a  sound  practical  as  well  as  theoretical  foundation  and 
whose  aim  shall  be  to  remove  the  causes  of  all  existing  evils 
that  injure  the  health. 

"Public  sentiment  is  more  favorably  inclined  towards  such 
a  problem  than  at  any  previous  time.  There  is  now  in  the  in- 
dustrial occupations  little  of  that  mediosval  seclusion  which 
made  the  discovery  of  natural  laws  the  closely  kept  secret  of 
the  guild  or  school,  and  which  always  strongly  opposed  the 
adoption  of  new  discoveries.  The  great  value  of  open  inter- 
communication and  instruction,  in  so  far  as  they  concern  fac- 
tory sanitation,  labor  protection,  and  the  preservation  of  life, 
is  recognized.  The  exertions  and  attainments  of  the  individ- 
ual under  these  conditions  are  thus  of  greater  value  to  the 
country  at  large.  They  smooth  the  way  for  those  that  aim  at 
similar  results,  and  make  their  attainment  more  certain." 


CHAPTER  VI 
BY-PRODUCTS  OF  INEFFICIENCY 

National  bunglioles — Frightful  wastes  of  carelessness — Cutting  the  throats 
of  American  forests — Train  of  evils  of  our  forest  policy — Terrible 
losses  from  conflagrations — How  $500  a  miniite  goes  up  in  smoke — 
A  thousand  mile  avenue  of  desolation — Insurance  ten  times  as  ex- 
pensive in  the  United  States  as  in  Europe — Antiquated  fire  fighting 
methods  of  the  United  States — The  fiery  trail  of  the  insect  across  the 
farm — The  coddling  moth  and  its  hundreds  of  millions  of  annual 
damage — How  the  American  farmer  wastes  $3,000,000  a  day — The 
losses  of  transportation — Haphazard  efforts  of  theatrical  producers — 
The  strangle  hold  of  monopoly  on  the  American  drama — ^The  gamble 
of  the  first  night — "Giving  the  public  what  it  wants" — Butchering 
foreign  plays — Annual  railroad  waste — Inefficiency  of  railroads  and 
industrial   plants  compared — Why   the  public   is  to  blame. 

As  in  many  industries,  the  by-products  assume  a  greater  im- 
portance than  the  original,  so  in  inefficiency,  the  indirect  results 
aggregate  totals  comparable  with  the  direct  results.  The  fail- 
ure to  exercise  ordinary  precautions,  the  failure  to  take  ad- 
vantage of  the  best  methods,  the  failure  to  adopt  new  ideas, 
and  the  failure  to  seize  industrial  opportunities  are  equivalent 
in  costliness  to  direct  losses  from  inefficiency. 

In  the  failure  to  take  ordinary  precautions  against  fire,  and 
in  carelessness  and  faulty  construction,  losses  amounting  to 
three-quarters  of  a  million  dollars  a  day  are  incurred  through- 
out the  country. 

The  excessive  and  wasteful  use  of  wood  in  buildings  is  largely 
responsible  for  fires,  and  wood  is  used  because  of  its  apparent 
cheapness.  Ultimately  wood  is  a  high  priced  building  material, 
since  its  true  value,  in  the  first  place,  as  has  been  indicated,  is 
much  higher  than  the  selling  price.  The  sacrificial  price  of 
wood  has  thus  resulted  in  the  erection  of  a  large  number  of 
buildings  of  an  inflammable  and  quickly  deteriorating  nature. 

If  the  wood  were  selling  at  its  true  value,  and  proper  build- 
ing laws  were  in  force,  both  of  which  would  be  the  case  under 
efficient    administration;    the    forests   would    be    properly    con- 

64 


BY-PRODUCTS  OF  INEFFICIENCY  55 

served  and  the  great  losses  of  fire  largely  prevented,  and  a 
double  result  of  inefficiency  cured. 

The  annual  fire  waste  in  the  United  States  for  the  four  yeara 
1906  to  1909  was  $1,257,716,955  or  an  average  annual  loss  of  over 
$251,000,000.  This  is  a  daily  average  loss  of  $689,160.  It  is 
true  this  period  included  the  San  Francisco  and  Baltimore 
fires.  Extending  the  period  to  ten  years  the  loss  was  $2,029,- 
734,345,  giving  an  average  annual  loss  of  $202,793,434  or  an 
average  daily  loss  of  over  half  a  million  dollars    ($556,091). 

The  yearly  losses,  according  to  the  records  kept  by  the  New 
York  Journal  of  Commerce  for  the  United  States  have  been  in  the 
last  fifteen  years  as  follows : 

1911  $234,337,250 

1910  234,470,600 

1909  203,649,200 

1908  238,562,250 

1907  215,671,250 

1906  459,710,000 

1905  175,193,800 

1904  252,554,050 

1903  156,195,700 

1902  149,260,850 

1901  164,347,450 

1900  163,362,250 

1899  136,773,200 

1898  119,650,500 

1897  110,319,650 

It  will  be  noticed  that  the  losses,  though  varying  greatly  from 
year  to  year,  have  more  than  doubled  during  this  period 
of  time,  a  condition  of  the  most  disquieting  nature. 
This  waste  is  an  absolute  loss  of  the  wealth  of  the  country. 
The  property  destroyed  by  fire  is  beyond  recoverj^  Insurance 
only  shifts  the  distribution  of  the  loss.  An  irrecoverable  loss 
it  still  remains. 

The  cost  of  preventative  measvires,  maintenance  of  fire  de- 
partments, protective  agencies  and  additional  cost  of  water  sup- 
ply raises  the  annual  total  $225,000,000  more. 

A  notable  fact  in  the  analysis  of  fire  losses  is  that  27%  were 
due  to  exposure — that  is,  the  fire  extending  beyond  the  build- 
ing in  which  it  originated.  The  extension  of  fire  results  from 
the  use  of  inflammable  materials  in  construction.  It  is  even 
more  noticeable  that  only  $68,000,000  of  the  loss  was  on  brick, 
concrete,  stone  and  other  slow  burning  constructions,  while  over 


56  THE  PRICE  OF  INEFFICIENCY 

double  that  amount,  or  about  $148,000,000  was  on  frame  build- 
ings. In  the  last  thirty-three  years,  the  total  fire  waste 
amounted  in  value  of  property  destroyed  to  more  than  $4,500,- 
000,000. 

It  is  a  reasonable  estimate  that  one-fifth  of  the  city  water 
supply  and  distribution  charges,  three-fourths  of  the  fire  de- 
partment charges,  and  over  four-fifths  of  the  fire  losses,  or  a 
total  of  nearly  $400,000,000  per  year,  may  be  considered  a  pre- 
ventable tax  on  the  nation. 

From  reports  of  United  States  consuls  it  has  been  shown  that 
the  loss  in  six  European  countries  for  a  period  of  five  years  was 
33  cents  per  capita.  The  loss  in  the  United  States  for  the  five 
years  ending  with  1907  was  $3.02  per  capita,  nearly  ten  times 
as  much. 

The  result  in  thirty  foreign  cities  gave  a  per  capita  loss  of 
61  cents  as  against  $3.10  in  the  five  years'  average  of  252  cities 
in  the  United  States. 

Taking  the  number  of  fires  to  each  1,000  of  population  in  the 
same  cities,  the  committee  on  statistics  found  it  to  be  4.05  in 
the  American  cities,  as  against  0.86  for  those  of  Europe,  show- 
ing also  that,  in  point  of  frequency,  fires  here  are  far  in  excess 
of  those  abroad. 

It  is  to  be  borne  in  mind  that  the  direct  fire  loss  is  not  the 
only  waste  of  resources.  Owing  to  the  greater  frequency  of 
fires  in  the  United  States,  and  their  greater  destructiveness, 
more  expensive  fire  exting-uishing  facilities  and  apparatus  must 
be  maintained  here. 

"We  may  add  that  it  has  been  stated  that  as  many  as  7,000 
lives  have  been  lost  by  fires  in  the  United  States  in  a  single 
year. 

The  excessive  difference  between  the  fire  waste  of  European 
countries  and  that  of  the  United  States  is  caused  principally  by : 

First :  The  difference  in  the  point  of  view  and  the  responsi- 
bility of  the  inhabitants  of  Europe  and  those  of  the  United 
States. 

Second :  Tlie  difference  in  the  constraction  of  the  buildings. 

Third :  The  regulations  governing  hazards  and  hazardous  ma- 
terials and  conditions,  and  in  the  enforcement  of  such  regula- 
tions. 

]\rr.  Powell  Evans  in  "Fire  Waste"  in  the  Survey  of  July 
1,  1911,  states: 

"The  1910  fire  loss  would  pay  the  total  interest  bearing  debt 


BY-PRODUCTS  OF  INEFFICIENCY  57 

of  the  country  in  four  years;  or  would  build  the  Panama  canal 
in  less  than  two  years.  In  other  terms,  it  exceeds  the  com- 
bined cost  of  the  United  States  Army  and  Na\'y  and  the  inter- 
est on  the  National  debt;  or  nearly  equals  the  combined  annual 
failures  and  pension  payments  in  the  United  States;  or  exceeds 
the  combined  United  States  gold  and  silver  production  and 
Post  Office  receipts.     These  are  all  annual  figures. 

"It  represents  about  40%  of  either  the  total  unused  United 
States  Government  receipts  or  total  expenditures,  or  the  net 
earnings  of  American  railways;  it  represents  about  80%  of 
either  the  United  States  Internal  Revenue  receipts  or  the 
United  States  Customs  or  the  interest  paid  on  the  railways  in 
the  country^  It  exceeds  the  combined  annual  value  of  the  wheat, 
hay,  oats  and  rye  crop,  and  it  is  twice  that  of  the  cotton  crop. 
It  costs  about  $30,000  for  each  hour  in  the  year  and  $500  for 
each  minute.  It  costs,  moreover,  more  than  1,500  lives  and  5,000 
serious  accidents  annually. 

"If  all  the  buildings  burned  last  year  in  the  United  States 
were  placed  together  on  both  sides  of  the  street,  they  would 
make  an  avenue  of  desolation  reaching  from  Chicago  to  New 
York,  and  although  one  seriously  injured  person  were  rescued 
every  thousand  feet,  at  every  three-quarters  of  a  mile  a  man, 
woman  or  child  would  nevertheless  be  found  burned  to  death. 
"There  are  certain  conditions  in  foreign  countries  that  op- 
erate to  affect  a  lower  fire  loss  than  would  reasonably  be  pos- 
sible here,  viz:  The  larger  use  of  non-combustible  materials, 
due  to  the  higher  cost  of  wood;  better  building  codes,  in  letter 
and  practice;  the  lower  height  and  smaller  areas  involved  in 
city  construction;  and  finally  the  intangible  influence  of  older 
civilizations,  which  makes  people  more  careful  of  small  savings 
in  all  their  affairs,  and  generally  more  cautious  than  we  have 
yet  become. 

"Allowing  duly  for  these  fundamental  differences  between 
the  countries  compared,  it  is  yet  apparent  that  the  differences 
in  the  fire  loss  in  the  United  States  over  that  of  the  principal 
western  European  countries  is  outrageously  and  criminally 
greater  than  it  should  be ;  and  this  condition  must  arise  largely 
from  the  ignorance,  the  carelessness  and  the  indifference  of 
this  countrA-'s  inhabitants.  Ignorance,  carelessness  and  isolated 
self-interest,  when  they  result  in  the  tremendous  sacrifices  of 
life  and  property  now  habitually  occurring  among  us  from  this 
one  cause,  become  nothing  less  than  criminal." 


58  THE  PRICE  OF  INEFFICIENCY 

In  the  United  States  insurance  costs  on  the  average  $3  per 
capita,  while  in  Europe  it  is  only  thirty  cents  per  capita.  And 
everyone,  although  not  insuring  directly,  pays  his  share,  in  one 
way  or  another,  of  insurance,  through  higher  rents  and  higher 
prices  of  commodities  manufactured  and  sold  in  insured  build- 
ings. 

The  application  of  the  remedies  for  fire  waste  will  be  slow, 
but  they  are  nevertheless  forcing  themselves  upon  the  atten- 
tion of  a  public  as  careless  as  the  American  public. 

American  Fire  Departments  need  throughout,  a  complete 
overhauling.  Antiquated  methods  and  apparatus  are  proving  a 
costly  burden.  The  fancied  superiority  of  the  departments  and 
the  self-satisfaction  displayed  should  be  promptly  exploded. 

Often  the  system  of  fire  alarm  depends  on  a  single  center  of 
distribution  for  a  whole  borough  or  city.  It  is  as  though  the 
telephone  system  were  centered  at  a  given  point,  damage  to 
which  should  put  the  whole  out  of  commission.  Surely  there 
should  always  be  a  distributing  system,  so  arranged  with  dif- 
ferent centers  that  one  or  several  might  be  eliminated  and  still 
leave  means  of  communication  between  the  remaining  centers 
effective. 

In  outlying  districts  particularly,  are  fire  alarm  wires  ex- 
posed and  subject  to  damage  and  interruption.  They  are  so 
frequently  interrupted  in  fact,  that  in  New  York,  for  example, 
an  average  may  be  struck  as  to  how  many  interruptions  may 
be  expected  to  occur  during  any  given  period. 

Not  only  are  fire  alarm  systems  defective  in  this  particular, 
but  as  indicated,  the  method  of  ringing  alarms  is  such  that  there 
is  much  time  wasted  in  starting  to  the  fire.  The  alarms  should 
appear  instantly,  as  annunciators  in  hotel  room  signal  sys- 
tems. Often  the  horses  are  hitched  and  the  engines  ready  to 
go  before  the  alarm  signal  to  tell  them  the  location  of  the  fire 
is  completed. 

Owing  to  the  brave  and  capable  personnel  of  the  American 
Fire  Departments  the  best  possible  results  are  produced  with 
the  equipment  at  hand,  but  it  is  in  the  administration  that  the 
departments  fail.  Although  less  subject  to  political  interfer- 
ences than  the  police  departments,  nevertheless  interested  mo- 
tives appear  and   produce  the  customary  inefficiency. 

Abroad,  the  heads  of  departments  are  either  trained  engi- 
neers or  administrators,  and  if  not  engineers,  they  are  assisted 
by  advisoiy  engineers.     The  highest  degree  of  technical  train- 


BY-PRODUCTS  OF  INEFFICIENCY  59 

ing  is  thus  brought  to  the  service  of  the  departments,  for  such 
men  make  the  subject  a  life  study. 

The  American  public  reading  only  the  stories  of  heroism  of 
the  individual  fireman,  is  not  aware  of  the  true  conditions  ex- 
isting in  the  departments,  and  how  behind  the  times  the  equip- 
ment and  appliances  are.  Even  when  our  reforms  do  come, 
they  come  in  a  most  belated  fashion.  When  we  are  beginning 
to  adopt  automobile  fire  engines,  as  at  present,  such  engines 
are  being  discarded  abroad  in  favor  of  electric  engines.  ]\Iany 
German  cities,  since  1905,  have  successfully  adopted  electrically 
propelled  fire  fighting  apparatus  and  that  is  the  universal  tend- 
ency at  present. 

The  United  States  Consular  report  of  August  9,  1911,  states : 

"The  city  of  Berlin  has  also  adopted  electricity  as  a  motive 
power  for  their  fire  department,  four  stations  being  already 
fully  equipped,  horses  and  gasoline  motors  being  dispensed 
with.  Among  the  many  advantages  of  the  system  was  a  saving 
of  over  half  the  cost  where  horses  had  been  used,  also  a  won- 
derful saving  of  time,  it  taking  but  12  seconds  from  the  time 
an  alarm  was  sounded  until  the  department  was  fully  under 
way  in  the  street.  Safety  and  simplicity  of  operation  were  also 
fully  demonstrated. ' ' 

Perhaps  the  most  striking  illustration  of  the  inefficiency  of 
American  fire  departments  was  seen  in  the  notable  Equitable 
Life  Insurance  building  fire  in  New  York,  1912. 

In  the  vaults  of  a  bank  in  the  building,  several  men  were 
trapped,  and  the  heavy  gratings  prevented  their  escape. 
Finally,  after  hours  of  work,  the  gratings  were  sawn  through 
and  all  but  one  of  the  men  escaped,  but  this  one,  an  unfortunate 
watchman,  died  with  his  hands  outstretched  toward  the  street, 
his  escape  cut  off  by  the  heavy  bars. 

It  might  appear  that  all  that  human  power  could  do  was 
done  to  effect  his  escape,  and  perhaps  it  was,  with  the  tools  at 
hand,  yet  no  man  ever  struck  down  in  premeditated  murder  was 
a  more  miserable  victim  to  human  treachery  than  this  man  w^as 
to  official  neglect  and  incompetency. 

Hours  were  wasted  sawing  iron  bars,  the  most  antiquated 
method  of  succor  that  could  have  been  adopted.  Had  the  de- 
partment provided  itself  with  a  very  simple  device,  in  use  for 
a  number  of  years  in  scores  of  garages  and  repair  shops  in  the 
city,  the  man  could  have  been  saved  with  little  trouble.  The 
device  is  knovm  as  the  oxo-acetylene   or  hydro-oxygen  torch, 


60  THE  PRICE  OF  INEFFICIENCY 

and  it  consists  of  a  small  but  intense  flame  fed  by  the  two 
g-ases,  from  portable  tanks.  It  was  used  in  the  work  on  the 
Maine  at  Havana  recently,  and  in  the  removal  of  the  Quebec 
bridge  wreck.  The  iron  bars  which  imprisoned  the  Equitable 
victim  could  have  been  cut  through  in  a  few  minutes  by  the 
flame,  like  so  much  cheese  and  the  man's  life  saved. 

Even  had  the  department  not  had  at  hand  such  an  apparatus, 
a  telephone  call  to  any  one  of  a  dozen  establishments  would 
have  brought  a  suitable  outfit,  long  before  any  sawing  could 
have  accomplished  the  desired  result.  Surely  this  man  was 
murdered,  and  his  hands  stuck  through  the  ice  for  days  before 
his  body  could  be  reached  and  removed,  were  lifted  in  a  mute, 
unconscious  appeal  for  mercy  and  justice. 

Yet  even  with  this  case  before  them,  how  many  of  the  fire 
departments  of  American  cities  are  provided  with  such  ap- 
paratus for  use  in  contingencies  which  are  bound  to  arise. 

During  the  progress  of  the  fire,  three  men  appeared  on  the 
cornice  at  the  northwest  corner  of  the  building,  directly  above 
the  vault  in  which  the  men  were  imprisoned  by  the  iron  bars. 
They  were  trapped  by  the  flames  and  were  in  what  soon  proved 
to  be  a  fatal  extremity.  What  was  done  to  rescue  them? 
Surely  the  inefficient  means  employed  convict  the  department 
of  murderous  negligence  and  on  no  less  than  three  counts. 

In  the  first  place,  a  ladder  was  raised  which  by  no  possibility 
could  have  reached  the  men,  being  far  too  short.  Certainly 
the  length  of  the  ladder  was  known  in  advance,  while  the  height 
of  the  building  was  apparent.  "What  possible  purpose  could  be 
expected  to  be  served  by  lifting  the  ladder  is  not  obvious.  Were 
the  chiefs  hysterical,  or  simply  fools?  They  must  have  known 
in  advance  that  there  was  no  possible  hope  in  lifting  the  ladder. 

Why  then  was  valuable  time  lost  in  the  operation? 

Finding  by  experiment  the  fact  that  should  have  been  real- 
ized in  advance,  the  ladder  was  abandoned  and  efforts  made  to 
throw  a  life  line  from  an  adjoining  taller  building.  Why,  it 
may  be  asked,  was  the  throwing  of  the  life  line  delayed  until 
after  the  abortive  experiment  of  the  ladder-lifting?  Is  a  fire- 
man unable  to  think  of  more  than  one  expedient  at  a  time? 
Nothing  prevented  the  throwing  of  the  life  line  earlier.  It 
did  not  need  to  Avait  on  the  ladder. 

Yet  after  the  line  was  thrown  and  the  men  attempted  to  make 
use  of  it,  it  parted;  according  to  the  report  being  burned 
through  by  the  flames  below.     The  result  was  that  two  of  the 


BY-PRODUCTS  OF  INEFFICIENCY  61 

men  fell  to  the  street  and  were  crushed,  while  the  third  dropped 
back  into  the  hell  of  fire  Avithin  the  walls. 

What  was  the  occasion  for  the  life  line  breaking  or  burning 
through?  If  it  was  burned  through,  it  was  not  properly  fire- 
proofed,  as  such  lines  should  invariably  be.  Perhaps  it  was 
only  an  ordinary  piece  of  rope,  picked  up  nearby.  Or  if  it 
was  fireproof ed  why  should  it  break?     Was  it  old  and  rotten? 

For  the  third  count,  there  was  no  life  net  in  the  street. 
Surely  humanity  can  be  shocked  in  no  way  as  by  the  idea  of 
men  falling  from  such  heights.  No  nets  appear  to  have  been 
spread  and  the  men  fell  directly  to  the  pavement. 

Although  falling  into  nets  from  a  great  height,  while  prac- 
ticed with  some  success  by  acrobats,  is  likely  to  have  serious 
consequences  from  the  dislodg-ment  of  the  internal  organs  from 
shock,  surely  the  victims  could  not  be  worse  off  than  in  falling 
into  the  street.  Properly  constructed,  life  nets  are  not  liable 
to  give  way,  and  the  negligence  of  the  department  in  not  hav- 
ing such  appliances  ready  or  in  not  utilizing  them  if  they  were 
at  hand  is  inexcusable. 

Throughout  the  details  of  fire  fighting,  the  systems  are  either 
out  of  date,  or  the  latest  modern  devices  have  not  been  adopted. 
For  example,  the  fireman's  helmet,  which  is  connected  with  an 
oxygen  supply  and  water  supply,  is  not  in  use.  Clothed  in  a 
fireproof  suit,  breathing  through  the  oxygen  tube  and  with 
water  pouring  over  him  from  such  a  helmet,  a  fireman  can  lit- 
erally pass  through  flames,  while  smoke  is  no  obstacle  whatever. 

A  few  such  helmets  in  use  in  fire  departments  would  be  the 
means  of  saving  a  great  number  of  lives  every  year,  of  those 
who,  overcome  by  smoke,  cannot  be  reached  by  firemen  equipped 
as  they  are  at  present  equipped.  No  amount  of  heroism  can 
take  the  place  of  such  an  apparatus.  Doubtless  some  of  the 
apparatus  may  be  expected  to  come  into  use  in  five  or  ten  years. 

The  conservatism  which  prevents  its  immediate  adoption 
is  difficult  to  understand.  In  the  principal  piece  of  equipment, 
it  is  predicted  that  horse  drawn  engines  will  disappear  in  five 
years.  They  disappeared  ten  years  ago  in  European  cities. 
It  may  be  that  there  are  not  enough  "practical"  men  behind 
the  new  forms  of  apparatus. 

The  enormous  damage  from  the  use  of  too  much  water  is 
another  serious  indictment  of  our  fire  fighting  methods.  Ex- 
cept in  cases  of  conflagration  or  where  buildings  are  gutted, 
the  water  damage  is  unnecessarily  great,  and  often  is  greater 


62  THE  PRICE  OF  INEFFICIENCY 

than  the  damage  from  the  fire  itself.  Not  infrequently  fatali- 
ties are  due  to  drowning  in  flooded  basements,  rather  than  to 
suffocation. 

The  great  consumption  of  water  in  American  cities  as  com- 
pared with  foreign  cities  may  be  seen  from  the  following  exam- 
ples taken  at  random: 

Pittsburg  220  gallons  per  day  per  capita ;  Buffalo,  310 ;  Phil- 
adelphia, 205 ;  Chicago,  225 ;  Salt  Lake  City,  310 ;  Paris,  65 ;  Lon- 
don, 39 ;  Liverpool,  38 ;  Amsterdam,  37 ;  Dresden,  26 ;  and 
Berlin,  22.  Even  with  these  small  amounts,  the  foreign  cities 
have  their  streets  and  sidewalks  flushed  regularly.  While  only 
a  small  part  of  the  American  excess  may  be  due  to  uses  of  fire 
departments,  it  is  caused  by  reasons  which  produce  inefficiency 
in  the  fire  departments  and  throughout  the  whole  municipal 
administrations. 

It  is  the  boast  of  American  fire  chiefs  that  they  manage  to 
flood  buildings  with  certain  enormous  quantities  of  water. 
This  is  a  boast  of  inefficiency.  Abroad  the  fire  chief  reports 
how  few  gallons  of  water  he  was  able  to  use  in  putting  out  a 
fire.  There,  apparatus  is  used  which  throws  the  water  in  thin 
sheets  under  high  pressure  and  extinguishes  the  fire  without 
flooding  the  lower  floors,  or  in  fact,  in  many  cases  even  without 
wetting  them,  as  it  is  evident  that  a  small  volume  of  water 
under  high  pressure  will  put  out  a  fire  more  effectively  than 
a  mere  flooding  of  the  floor.  Smaller  hose  is  generally  used, 
which  makes  it  more  available,  while  every  modern  device  for 
fire  fighting  is  also  employed. 

One  of  such  devices  which  might  be  adopted  with  great  bene- 
fit in  many  American  cities  is  the  endless  bag  fire  escape,  reach- 
ing from  a  window  to  the  street,  the  lower  end  being  held  some 
distance  away  from  the  building.  Thus  a  person  sliding  down 
inside  the  bag,  shoots  out  at  the  bottom  in  a  horizontal  direc- 
tion, instead  of  dropping  vertically  as  down  a  rope. 

The  reason  given  for  not  adopting  the  small  hose,  high  pres- 
sure system  here  is  that  it  has  been  tried  and  not  found  prac- 
tical. This  may  be  the  same  practical  that  was  encountered  in 
the  case  of  the  fire  engines. 

The  excessive  and  wasteful  use  of  wood  in  buildings  is  largely 
responsible  for  fires,  and  wood  is  used  because  of  its  apparent 
cheapness.  Ultimately,  wood  is  a  high  priced  building  ma- 
terial, since  its  true  value,  in  the  first  place,  is  much  higher 
than  its  selling  price,  and  its  durability  is  so  much  less  than 


BY-PRODUCTS  OF  INEFFICIENCY  63 

other  materials.  The  failure  to  renew  forests  and  the  sacrifi- 
cial price  at  which  wood  is  sold,  representing  only  the  cost  of 
getting  it  to  market  and  not  the  cost  of  reproducing  the  forest 
crop,  has  resulted  in  the  erection  of  a  large  number  of  build- 
ings of  an  inflammable  and  quickly  deteriorating  nature.  If 
wood  were  selling  at  its  true  value  and  proper  building  laws 
were  in  force,  both  of  which  would  be  the  case  under  efficient 
administrations,  the  forests  would  be  conserved  and  the  great 
loss  of  fire  largely  prevented. 

The  use  of  proper  apparatus  to  extinguish  fires  would  effect 
large  savings,  but  it  must  not  be  lost  sight  of  that  the  greatest 
saving  would  result  from  greater  precautions  on  the  part  of  the 
public,  since  the  fire  department  is  never  responsible  for  caus- 
ing a  fire,  leaving  that  entirely  to  the  public. 

The  losses  by  fire  principally  occur  in  the  cities,  but  though 
seldom  considered  by  the  public,  the  rural  districts,  by  way  of 
the  compensations  of  Nature,  seem  to  be  subjected  to  a  form  of 
what,  to  see  its  results,  appears  to  be  a  living  fire.  Swarms  of 
noxious  insects  passing  over  a  district  Mall  leave  it  almost  as 
bare  as  would  a  forest  fire,  and  undo  in  a  few  hours  the  labor 
of  the  farmer  for  months  and  years.  Yet  this  form  of  destruc- 
tion, too,  is  largely  the  result  of  carelessness  and  lack  of  the 
use  of  known  preventatives. 

The  losses  from  insects  in  the  rural  districts  amount  to  three 
or  four  times  the  total  of  city  fires,  and  they  are  augmented  by 
the  depredations  of  mammalian  pests. 

The  National  Conservation  Commission,  1909,  states: 

"Aside  from  careless  or  ignorant  farming  and  such  hostile 
climatic  conditions  as  storms  and  droughts,  the  most  serious 
enemies  to  crops  are  noxious  insects  and  mammals. 

"The  chief  insect  enemies  of  the  grains  are  the  corn-root 
worm,  the  bollworm,  the  chinch  bug,  the  Hessian  fly,  plant  lice, 
grasshoppers,  cutworms  and  army  worms.  The  woret  enemy 
of  cotton  is  the  boll  weevil.  Fruits  are  injured  chiefly  by  the 
coddling  moth  and  the  San  Jose  scale.  The  Bureau  of  Ento- 
mology estimates  that  the  annual  damage  by  noxious  insects  is 
no  less  than  $659,000,000.  This  total  includes  the  cost  of  pre- 
ventative measures  which  greatly  reduce  the  annual  aggregate 
loss. 

"The  average  yearly  loss  to  animal  products  from  flies,  ticks 
and  other  insects  is  estimated  at  $267,000,000.  This  does  not 
include  the  enormous  loss  of  human  life  and  the  cost  of  disease 


64  THE  PRICE  OF  INEFFICIENCY 

due  to  house  flies,  mosquitoes,  fleas  and  other  germ  carrying  in- 
sects— a  loss  much  greater  than  that  suffered  by  the  live  stock 
and  their  products. 

''The  Biological  Survey  estimates  that  the  damage  to  live 
stock  and  crops  by  wolves,  rats,  mice,  prairie  dogs,  foxes  and 
other  mammals  averages  over  $100,000,000  yearly.  This  figure 
also  includes  the  cost  of  preventative  measures;  without  which 
the  losses  would  be  much  greater.  Birds  are  generally  benefi- 
cent as  destroyers  of  noxious  insects  and  mammals. 

' '  These  figures  are  staggering  in  the  aggregate,  but  they  must 
be  regarded  as  trustworthy  and  as  representing  an  enormous 
scale  of  preventable  loss." 

According  to  the  Bureau  of  Statistics  of  the  Department  of 
Agriculture,  the  average  loss  by  disease  during  the  past  five 
years  was: 

"Among  horses,  1.8%;  among  cattle,  2%;  among  sheep, 
2.2%  and  among  swine,  5.1%.  The  aggregate  annual  loss  av- 
eraged $93,000,000. 

''The  most  preventable  disease  among  cattle  and  swine  is 
tuberculosis;  it  is  estimated  that  at  least  1%  of  the  beef  cattle, 
10%  of  dairy  kine,  and  2%  of  swine  are  affected.  Sheep  and 
cattle  suffer  seriously  from  scabbies,  while  hog  cholera  is  preva- 
lent among  swine.  Texas  fever  among  cattle,  transmitted  by 
a  tick,  is  a  destructive  disease,  causing  a  direct  animal  loss  es- 
timated at  $40,000,000.  All  these  diseases  are  remediable  and 
some  or  all  may  be  eradicable. 

"The  total  annual  losses  to  the  agriculture  of  the  country 
including  live  stock,  animal  products,  and  grain  in  storage, 
from  insects,  mammals,  and  disease  is  estimated  at  $1,142,- 
000,000  or  one-sixth  of  the  total  production. 

With  inefficiency  of  fire  wastes  and  rural  wastes,  may  be  in- 
cluded the  wastes  of  transportation,  which  has  been  so  keenly 
discussed  recently  in  the  efforts  of  shippers  to  keep  railroad 
rates  within  reason. 

Yet  in  the  discussion  but  little  reference  was  made  to  the 
enormous  freight  hauls  due  to  the  location  of  manufacturing 
plants  at  great  distances  from  the  sources  of  their  raw  ma- 
terials, a  condition  analogous  to  the  allowing  of  emigrants  to 
settle  in  one  locality  instead  of  distributing  them  to  places 
where  they  might  be  needed. 

The  loss  due  to  careless  handling  of  freight  is  another,  the 
total   of  which   though   large   is  difficult  to   ascertain.     On   a 


BY-PRODUCTS  OF  INEEFFICIENCY  65 

freight  station  platform,  a  boxed  piano  will  be  thrown  on  its 
side  without  the  slightest  care  on  the  part  of  the  handler.  The 
piano  company  cannot  object,  as  their  goods  would  only  be  the 
more  roughly  handled  thereafter,  but  several  hundreds  of  dol- 
lars' worth  of  damage  is  done,  and  no  responsible  source  can  be 
reached. 

Ordinary  baggage  is  smashed  without  compunction,  and  no 
definite  figures  as  to  the  loss  can  be  computed.  Instead  of  an 
objection  which  would  have  an  effect  in  the  discontinuance  of 
such  wanton  destruction,  the  system  merely  furnishes  point  for 
witticisms  in  comic  papers. 

In  the  handling  of  eggs,  however,  it  has  been  estimated  that 
losses  amounting  to  $40,000,000  a  year  are  incurred  through  im- 
proper handling  which  extends  back  to  the  farmer  himself. 

The  thro^ving  around  of  eggs  in  this  reckless  manner  on 
freight  depot  platforms  is  a  particularly  noticeable  example  of 
a  double  waste,  since  if  the  eggs  so  mistreated  were  reserved 
for  similar  uses  in  other  places,  theaters  for  example,  the  eggs, 
though  still  sacrificed,  w^ould  induce  no  little  improvement  in 
histrionism  and  the  drama  generally,  an  improvement  to  which 
it  is  certainly  entitled. 

An  improvement  in  the  theater  would  reflect  itself  in  an  im- 
proved tone  of  the  morals  of  the  public.  Thus  it  may  be  seen 
that  the  egg  handlers  are  Largely  to  blame  for  the  uninspired 
condition  of  the  theater,  and  consequently,  any  laxity  of  con- 
duct which  may  be  observed  on  the  part  of  the  public. 

The  theater,  which  holds  the  mirror  up  to  nature,  often  a 
mirror  of  distorted  glass  in  which  Nature  could  hardly  recog- 
nize herself,  manages  to  have  the  holding  done  by  a  curious  set 
of  persons  known  as  managers,  who  spend  most  of  their  time 
in  "giving  the  public  what  it  wants."  A  certain  real  want  of 
the  public,  that  of  some  convenient  movable  object,  they  seldom 
undertake  to  supply,  preferring  it  scrambled. 

Managers  are  strenuously  engaged,  along  with  some  twenty- 
five  thousand  actors  and  other  performers,  in  giving  the  public 
what  it  w^ants,  or  to  be  more  accurate  in  giving  the  public  what 
they  figure  out  it  wants.  In  this  process  they  have  unlimited 
access  to  all  the  dramatic  ideas  which  have  ever  been  used,  or 
which  are  ever  likely  to  be  used,  and  in  addition,  a  vast  fund 
of  plays  from  abroad,  and  yet  statistics  prove  that  only  one  play 
in  five  is  a  substantial  success. 

Managerial  efficiency  may  thus  be  placed  at  about  20%,  a 


66  THE  PRICE  OP  INEFFICIENCY 

result  which  springs  from  the  presence  in  the  managerial  field 
of  a  large  number  of  individuals  who  have  little  or  no  knowl- 
edge of  the  drama  as  an  art,  but  who  are  there  for  the  purpose 
of  making  money.  They  gamble  on  new  productions  one  after 
the  other,  selecting  them  with  little  rhyme  and  less  reason,  and 
the  profits  of  the  one  success  out  of  five  attempts  is  sufficient 
to  enable  them  to  continue  in  the  business.  From  the  stand- 
point of  social  economy,  the  ratio  of  successes  to  failures  proves 
that  the  present  theatrical  system  is  highly  inefficient.  No  well- 
organized  industry  should  show  such  poor  results. 

In  the  vaudeville  field,  an  exceptionally  absurd  method  is  in 
vogue,  that  of  trying  out  acts.  The  small  manager  or  actor 
who  would  get  his  act  into  the  vaudeville  circuits  of  theaters, 
must  rehearse  and  play  it  at  his  own  expense  for  a  time,  until 
it  is  approved  by  the  managements.  All  this  waste  of  time  and 
effort,  for  there  are  not  less  than  ten  try  outs  for  every  act 
that  gets  booking,  could  be  avoided  by  the  simple  reading  of 
the  manuscript  by  the  managers  in  advance.  Yet  they  do  not 
seem  to  understand  that  the  expense  which  attaches  to  the 
numerous  failures  to  get  acts  accepted,  causes  such  loss  and 
discouragement  to  the  producers  that  the  forces  tending  to  sup- 
ply them  with  new  acts  are  vitiated,  and  the  whole  attractive- 
ness of  their  programmes  hurt  permanently. 

Separate  trusts  control  the  regular  and  vaudeville  theaters 
to  such  an  extent  that  the  production  of  a  piece  depends  on 
the  will  of  one  or  two  men.  It  is  obvious  with  individual 
initiative  choked  off  in  this  manner  that  the  theater  must  lose 
its  force  and  variety,  and  be  permeated  with  a  class  of  plays 
more  or  less  in  accord  with  the  opinions  of  those  who  rule  the 
destinies  of  the  theaters.  Variety  is  thus  lost.  That  this  con- 
dition exists  is  shown  by  the  fact  that  the  theater  to-day  is  in  a 
financial  condition  such  as  it  never  sunk  to  before.  The  theat- 
rical managers  who  have  shown  independence  are  ruined  or 
driven  into  other  lines  of  business  by  the  destructive  methods 
of  the  trust,  which  largely  consist  in  arranging  the  routes  of 
the  traveling  companies  of  the  blacklisted  managers  in  such 
manner  that  great  distances  intervene  between  the  stops  on  the 
route.     Thus  profits  are  eaten  up  by  railroad  fares. 

Rebellion  against  this  system  is  well  nigh  impossible  since, 
owing  to  their  control  on  the  other  hand  of  the  privilege  of 
booking  the  plays,  should  the  manager  of  a  theater  leave  the 
syndicate   booking,   he  would   get  no  plays  to  present  in  his 


BY-PRODUCTS  OF  INEFFICIENCY  67 

house.  The  syndicates  thus  stand  between  both  the  proprietors 
of  the  theaters  and  of  the  plays,  and  use  one  with  which  to  club 
the  other  into  submission.  This  iniquitous  system  has  been  in 
vogue  some  fifteen  years  or  more,  but  it  is  having  a  hard  row 
to  hoe  at  present  due  to  the  fact  that  the  public,  having  been 
exploited  by  other  trusts  have  no  money  with  which  to  patron- 
ize the  theatrical  trusts'  attractions,  and  instead  are  going  to 
the  cheaper  and  inferior  moving  picture  theaters  and  stock 
companies  located  in  the  various  cities  permanently.  It  will 
thus  be  seen  that  it  takes  a  trust  to  scotch  a  trust. 

One  of  the  causes  which  produces  managerial  inefficiency  is 
that  of  "adapting"  or  ''Americanizing"  foreign  plays.  This 
is  carried  on  with  so  little  regard  for  the  integrity  of  thought 
of  the  author  that  he  is  relegated  to  a  most  obscure  position. 
Even  in  the  case  of  native  authors,  the  smallest  piece  of  furni- 
ture about  the  theater  is  usually  the  author.  He  is  frequently 
allowed  no  place  at  rehearsal,  except  the  freedom  of  roaming 
up  and  down  the  back  aisle  of  the  theater,  while  the  stage  man- 
ager and  actors  proceed  to  make  the  play  into  what  the  public 
wants,  according  to  their  idea  of  it.  The  manager,  risking  his 
money,  feels  that  he  has  the  right  to  mold  the  play  according 
to  his  own  opinions.  Too  often,  however,  although  the  author 
may  show  exuberances  that  should  be  checked,  the  manager  is 
similarly  at  fault  with  no  power  to  check  him,  except  the  in- 
sulted intelligence  of  the  audience  which  tells  him  in  the  end 
unmistakably  by  the  empty  condition  of  the  box  office. 

A  great  proportion  of  the  plays  from  abroad  fail  in  America, 
yet  this  is  after  the  managers  have  seen  them  played  abroad, 
know  how  the  production  should  be  made,  and  should  know 
how  they  ought  to  be  received  by  American  audiences.  In 
many  cases,  however,  portions  of  the  play,  which  the  managers 
decide  the  American  audience  "will  not  stand  for"  are  elim- 
inated, and  then  failure  is  wondered  at. 

A  striking  example  of  what  a  manager  can  do  when  he  tries 
his  best,  is  seen  in  the  production  of  "The  Great  Name," 
adapted  from  the  German  after  having  proved  a  great  success. 

Louis  Sherwin,  a  critic  on  the  New  York  Glohe,  writing  in 
the  issue  of  Oct.  14,  1911,  describes  the  process  and  its  results: 
"About  the  most  remarkable  recent  instance  of  this  is  the 
American  production  of  'The  Great  Name.'  It  is  remarkable 
because  the  changes  made  by  the  producer  were  more  glaringly 
unnecessary  than   usual.     Here  was  not  a  case  of  an  untried 


68  THE  PRICE  OF  INEFFICIENCY 

piece  of  doubtful  value.  It  was  acted  originally  as  the  author 
intended  it  should  be,  and  it  pleased  the  public  it  was  written 
for.  The  producer  had  every  chance  of  seeing  what  effect  it 
had  when  played  before  a  theater  full  of  people.  It  was — 
and  is  still  to  some  extent — a  comedy  of  real  delicacy  and  sen- 
timental charm.  And  yet  all  manner  of  vulgarisms  were  in- 
truded in  order  to  'Americanize'  it. 

"Take  the  character  of  the  music  publisher,  for  example. 
In  the  original  he  is  described  as  follows:  'A  genial,  well- 
dressed,  well-groomed  gentleman,  without  diamonds,  shrewd, 
over-polite,  and  without  accent  except  when  under  excitement.' 

"In  the  American  production  this  person  becomes  a  vulgar 
and  abounding  old  clothes  merchant — one  of  the  cheapest,  most 
hackneyed  figures  of  vaudeville  and  burlesque,  the  typical 
'comic'  Hebrew,  brimming  over  with  ten-twenty-thirty  humor. 

"As  the  German  authors  wrote  it,  the  composer's  mother 
must  have  been  a  charming  old  character,  such  a  woman  as  you 
might  imagine  being  the  mother  of  a  man  half  genius  and  half 
child,  who  was  always  very  much  in  need  of  being  mothered. 
This  crops  out  all  through  the  play;  for  whenever  Hofer  be- 
comes excited,  whenever  he  flies  off  in  a  tantrum,  and  is  in 
danger  of  upsetting  everything  by  his  temper,  it  is  his  mother 
who  calms  him  and  smooths  over  all  difficulties.  It  is  she, 
moreover,  who  transacts  all  his  business  for  him  and  sees  that 
his  home  is  quiet  and  comfortable.  At  the  Lyric  this  part  is 
acted  by  Lizzie  Hudson  Collier,  who  performs  it  in  the  stiffest 
manner  imaginable,  and  makes  of  it  the  traditional  grand  dame 
• — another  hackneyed  stage  figure,  quite  out  of  place  in  a  piece 
of  this  nature.  Inasmuch  as  this  actress  has  previously  dis- 
played much  intelligence  in  other  roles,  one  is  led  to  the  con- 
clusion that  she  employed  such  an  incongruous  method  because 
she  was  told  to. 

"Furthermore,  as  the  principal  characters  are  musicians,  the 
environment  known  as  a  'musical  atmosphere'  is  eminently  nec- 
essary. But  not  in  any  one  of  the  three  acts  do  these  person- 
ages move  amid  surroundings  they  would  be  likely  to  affect  in 

real  life. 

"Now  all  these  defects  spring  from  the  tendency  of  certain 
American  managers  to  ignore  the  author.  After  all,  the  play- 
wright has  some  rights  other  than  to  the  payment  of  royalties. 
To  be  sure,  they  are  the  most  important,  but  the  writer  is  en- 
titled to  have  some  attempt  made  to  convey  his  meaning  to  the 


BY-PEODUCTS  OF  INEFFICIENCY  69 

public.  Moreover,  it  is  impossible  to  dismiss  the  conviction  that 
in  the  long  run  it  will  pay  to  give  some  heed  to  the  intentions 
of  the  man  who  wrote  the  play.  In  numerous  other  cases,  the 
same  policy  has  proved  disastrous,  and  the  'practical  theatrical 
men'  have  been  so  ruthlessly  practical  that  they  have  lost 
money. ' ' 

Private  management  of  theaters,  while  it  gives  full  play  to 
individual  initiative,  cannot  greatly  excel,  it  would  appear,  the 
results  which  would  be  achieved  in  municipal  and  governmental 
theaters. 

Private  management,  though  praised  as  a  system,  does  not 
in  reality  have  the  great  advantage  over  governmental  manage- 
ment that  is  generally  supposed,  no  matter  what  phase  is  con- 
sidered. 

Private  management  in  its  operation  of  the  railroads,  where 
it  has  had  full  sway,  has  proven  wasteful  and  extravagant,  and 
the  much  vaunted  superiority  of  private  management  to  gov- 
ernment management  is  not  clearly  in  evidence. 

Mr.  Harrington  Emerson,  eminent  on  Efficiency  Engineer- 
ing, says  in  the  Engineering  Magazine  for  October,  1911 : 

"Railroads  spend  for  supplies  $500,000,000  a  year.  The  av- 
erage efficiency  in  industrial  plants  is  not  above  60%.  TVe  can 
allow  70%  for  the  railroads.     The  annual  waste  is  $150,000,000. 

"The  railroad  payroll  is  $1,000,000,000.  The  average  indus- 
trial efficiency  in  personal  service  is  about  60%.  In  the  rail- 
roads we  can  allow  70%,  and  the  annual  waste  is  $300,000,000. 

"The  efficiency  of  fixed  charges  in  industrial  plants  is  rarely 
higher  than  25%,  unless  they  run  twenty-four  hours  a  day. 
Fixed  charges  cost  railroads  $800,000,000  a  year;  allowing  an 
efficiency  of  three  times  that  of  industrial  plants,  or  75%,  the 
annual  waste  is  $200,000,000. 

"SUMMARY 

.  Efficiency 

Amount        per  cent.         Waste 

Materials    100 

Supplies    $    500,000,000  70  $150,000,000 

Personal  Service 1,000,000,000  70  300,000,000 

Fixed  charges    800,000,000  75  200,000,000 

"As  to  each  one  of  these  aggregates,  the  reasons  for  and  the 
extent  of  the  losses  can  be  ascertained  item  by  item. 

"Neither  the  comparative  nor  the  actual  amount  of  waste 


70  THE  PRICE  OF  INEFFICIENCY 

is  essential  to  the  discussion;  the  problems,  diagnosis  and  the 
cure  are  the  same,  whether  20%  or  2%  of  the  population  is 
dying  of  the  bubonic  plague;  the  problems  of  diagnosis  and 
remedy  are  the  same  whether  the  railroads  are  more  wasteful 
or  less  wasteful  than  industrial  plants,  whether  the  annual  pre- 
ventable waste  is  $700,000,000  or  $70,000,000. 

"Railroad  wastes  are  like  hygienic  wastes.  The  latter  are 
due  to  a  great  variety  of  causes — inheritance,  unhygienic  loca- 
tion, avocations,  ignorance,  indifference,  the  pressure  of  other 
and  more  powerful  incentives.  Norway  has  reduced  its  death 
rate  far  below  that  of  any  civilized  country,  but  first  Norway 
realized  the  magnitude  of  the  problem  and  put  in  a  generation 
striving  for  its  ideals. 

"Railroad  wastes  are  like  agricultural  wastes. 

"Germany  in  twenty-five  years  has  increased  her  output  of 
staples  per  acre  under  cultivation  between  30  and  40%.  Ger- 
many to-day  averages  per  acre  100%  more  than  is  realized  in 
the  United  States.  The  German  agricultural  society  has  been 
busy  for  twenty-five  years. 

"When  the  whole  country,  governments,  investors,  executives, 
workers,  patrons,  committees,  wake  up  to  the  fact  that  pre- 
ventable railroad  wastes  aggregate  more  than  two  million  dol- 
lars for  every  working  day,  that  half  of  this  loss  could  be  rather 
easily  eliminated,  certainly  as  easy  as  the  increase  per  acre  and 
more  easily  than  the  lengthening  of  life  in  Norway;  when  it  is 
realized  that  the  cost  of  effecting  loss  elimination  need  not  ex- 
ceed 57o  of  the  saving;  when  it  is  realized  that  the  two  mil- 
lion dollar  a  day  gain  will  be  inevitably  distributed  to  those  who 
do  railroad  work,  to  those  who  furnish  money  and  to  those  who 
supply  railroad  traffic,  then,  and  not  before,  will  the  great 
problem  be  taken  up  seriously." 


CHAPTER  VII 
PEIVATE  MONOPOLY 

The  goal  of  commerce — Origin  of  monopolies — ^The  end  of  competition — 
The  great  commercial  triangle — The  tyranny  of  the  single  seller — 
Gigantic  growth  of  American  monopolies — The  monopolistic  parasite — 
The  point  of  saturation — The  legal  trick  that  made  the  trusts — ^The 
two  great  camps  of  capitalism — Sympathetic  control  and  its  menace — • 
The  total  wealth  of  the  United  States — The  aggrandizement  of  the 
larger  groups — Inevitable  absorption  of  small  business  units — Diges- 
tion of  securities — Enormous  capital  controlled  in  New  York — Con- 
centration of  wealth — Despotic  possibilities  of  aggregations  of  wealth 
— The  dollar  vs.  the  flag — The  desperate  problem  of  America  to-day — 
The  money  king  of  the  future,  now  an  infant  in  arms  or  a  child  at 
play? 

Monopoly  is  the  effort  of  the  individual,  the  group  or  the 
government  to  profit  at  the  expense  of  the  public.  The  state 
may  at  will  create  for  itself  various  monopolies  and  monopolies 
have  often  great  beneficial  effects. 

The  post  office  is  a  government  monopoly,  the  power  to  issue 
money  and  collect  taxes  are  similarly  government  monopolies. 
Some  governments  by  engaging  in  commerce  make  sufficient 
profits  so  that  there  is  no  taxation,  thus  dispensing  with  that 
monopoly. 

In  previous  times  governmental  monopolies  were  much  more 
frequently  granted  by  the  crown  to  individuals  than  utilized  by 
the  governments  themselves.  At  present,  the  principal  monop- 
olies granted  to  individuals  by  governments  are  those  of  patents 
and  copyrights. 

Partial  monopolies  take  the  form  of  tariff  in  the  interests  of 
certain  classes  of  protected  industries. 

Competition  is  lauded  as  the  desirable  condition,  and  mo- 
nopoly comes  in  for  general  condemnation,  but  in  reality 
monopoly  and  competition  are  different  ends  of  the  same  stick, 
for  the  whole  effort  of  competition  is  to  achieve  monopoly. 

There  are  three  or  more  parties  to  a  commercial  transaction, 
normally,  the  rival  sellers  and  the  buyer.     The  buyer  encour- 

71 


72  THE  PEICE  OF  INEFFICIENCY 

ages  competition  in  his  own  interest,  but  when  out  of  the  strug^ 
gle,  one  seller  emerges  triumphant,  the  buyer  is  largely  at  his 
mercy.  The  seller  has  reached  the  goal  of  monopoly,  and  the 
buyer  while  applauding  the  process  as  long  as  it  remains  in  the 
stage  of  competition,  is  by  no  means  enthusiastic  over  the  out- 
come. 

The  United  States,  after  a  century  and  a  third  of  competi- 
tion, has  reached  the  stage  where  competition  has  run  its  course. 
The  process  is  at  an  end,  the  single  seller  holds  the  field  and 
the  buyer  is  vastly  disturbed,  in  fact  is  being  robbed  right  and 
left  by  all  sorts  of  single  sellers  of  everything  he  needs  to 
buy. 

Two  courses  must  be  pursued,  either  competition  must  be 
restored  and  artificially  fostered,  or  the  buyer  must  take  the 
socialistic  step  of  permitting  the  one  seller  to  continue  but  of 
regulating  the  price.  All  that  competition  can  do  is  to  regulate 
the  price  so  that  however  this  is  achieved,  it  would  seem  to  be 
the  same  in  the  end  to  the  buyer,  while  as  for  monopoly,  it  is 
evident  that  the  price  must  be  regulated  in  one  way  or  another, 
and  governmental  price  regulation  is  rather  sought  by  the  mo- 
nopoly, possibly  because  of  the  prospect  of  being  able  to  regu- 
late the  government  later  on. 

The  price,  while  all  important  to  the  buyer,  is  not  as  impor- 
tant to  monopoly  as  its  continuance  as  the  only  seller. 

At  present  the  United  States  is  in  a  turmoil.  The  customs 
and  usages  of  commerce  for  centuries  have  come  to  an  end. 
Monopoly  has  suddenly  assumed  gigantic  proportions.  The  old 
worm-eaten  edifice  of  competition  has  been  undermined,  por- 
tions have  collapsed,  and  a  state  of  panic  exists,  with  a  thousand 
leaders  leading  in  a  thousand  different  vortexes. 

Groups  are  for  rehabilitation  of  competition,  others  for  regu- 
lation of  monopoly,  others  for  a  policy  of  inertia  and  others 
have  each  their  own  schemes  to  an  endless  number.  The  mo- 
nopolies in  control  of  the  situation  continue  to  grow  in  power 
but  fear  the  day  of  reckoning.  Like  swollen  parasites,  the 
monopolies  cover  the  body  of  the  victim  with  but  two  results  in 
view:  the  exhaustion  of  the  supply  of  blood  or  the  point  of 
monopolistic  saturation,  the  moment  when  the  endurance  of  the 
victim  ceases  and  the  parasite  is  shaken  off  at  whatever  cost. 

America  shows  signs  of  shaking  the  monopolies  off,  but  the 
process  is  one  that  will  be  painful  if  not  impossible. 


PRIVATE  MONOPOLY  73 

The  extent  to  which  privately  controlled  combinations  of  cap- 
ital have  grown  in  America  is  a  social  phenomenon  never  before 
observed  in  the  history  of  the  world. 

It  has  been  largely  if  not  wholly  made  possible  by  the  com- 
mercial contrivance  of  the  corporation,  the  association  of  indi- 
viduals free  from  risk  other  than  the  amount  of  their  investment 
in  the  corporation.  It  is  safe  to  say  that  corporations  if  they 
had  never  been  authorized  by  the  laws  of  the  various  states  to 
own  stock  in  other  corporations,  could  never  have  reached  the 
importance  they  now  assume.  Even  if  the  freedom  from  addi- 
tional liability  of  stockholders  had  not  been  granted,  the  present 
conditions  could  not  have  arisen. 

Especially  rapid  has  been  the  growth  of  masses  of  capital 
since  the  former  privilege  was  granted,  a  condition  dating  back 
less  than  a  generation. 

The  states,  by  abolishing  corporations,  or  by  striking  out  the 
privilege  of  owning  stock  in  other  corporations  or  the  freedom 
from  individual  liability  of  the  stockholders,  could,  almost  at  a 
blow,  stop  further  accumulations  and  initiate  a  policy  which 
will  work  towards  the  reestablishment  of  the  old  order  of  com- 
petition. 

The  inability  of  the  states  to  revise  the  charters  of  corpora- 
tions is  also  a  bar  to  regulating  conditions.  It  was  originally 
assumed  that  the  states  could  rescind  powers  granted  corpora- 
tions taking  out  charters,  but  a  decision  of  the  Supreme  Court 
in  the  Dartmouth  college  case  two  or  three  generations  ago, 
decided  on  a  very  narrow  margin  in  the  court,  has  caused  more 
damage  to  the  country  than  perhaps  any  other  decision  ever 
rendered  by  the  court. 

Will  the  states  take  action  against  corporations;  will  compe- 
tition be  restored  or  will  monopoly  be  continued?  It  is  for 
the  public  to  decide. 

The  extent  of  the  accumulation  of  capital  in  a  few  hands  is 
seen  by  the  following  table,  by  John  Moody,  the  noted  financial 
statistician  and  writer  in  McClure's  Magazine. 

It  represents  the  control  of  two  groups  of  capitalists,  and 
their  followers :  the  Morgan  group  and  the  Standard  Oil  group. 
The  percentages,  where  not  otherwise  indicated,  are  calculated 
from  the  figures  of  capitalization  appearing  in  Poor's  and 
Moody's  Manuals. 


74  THE  PRICE  OF  INEFFICIENCY 

PERCENTAGES  OF  INDUSTRIES  AND  RESOURCES  CONTROLLED. 

Central  Group  Alliances  Outside 

Railroads   61  25  14 

Express  and  Pullman   93J  . .  6| 

Anthracite  Coal   (supply  owned)    88 J  6J  5 

Steel    82  5  13 

Cement  (output)    S'3|  . .  66f 

Petroleum  (output  handled)    67  18  15 

Lead    (output)     60  40 

Copper   (output)    60  40 

Telephone  74  . .  26 

"This  table  gives  a  general  idea  of  the  control  that  these 
groups  and  their  allies  have  gained  in  certain  specified  indus- 
tries, while  only  a  rough  and  only  a  partial  statement.  The 
control  of  these  men  has  gone  everywhere  that  it  is  possible  to 
create  a  practical  working  monopoly  of  any  kind.  Steamship 
lines,  cracker-baking,  the  manufacture  of  farm  machinery;  these 
and  many  other  industries  as  widely  varied  have  been  com- 
bined into  the  so-called  "trusts"  controlled  by  them.  And 
the  list  is  always  extending. ' ' 

The  vast  amount  of  capital  that  is  controlled  in  these  indus- 
tries is  indicated  by  an  estimate  prepared  by  Mr.  Moody: 

"Outside  of  small,  close  business  corporations,  owned  by  in- 
dividuals, the  total  corporate  capitalization  in  par  value  in  the 
United  States  at  present  is  not  over  $43,000,000,000.  The 
wealth  of  the  United  States,  according  to  last  reports,  was  in 
the  neighborhood  of  $110,000,000,000,  of  which  about  50%  was 
represented  by  realty  values,  the  balance  being  tangible  prop- 
erty of  thousands  of  different  kinds.  So  that  we  see,  after  all, 
that  the  trend  towards  concentration  in  corporate  control  has 
now  extended  so  far  that  approximately  80%  of  all  the  vital 
corporate  capital  of  the  country  is  under  the  domination  or  con- 
trol of  this  powerful  group  of  Wall  Street  interests  which  we 
have  referred  to.     .     .     ." 

From  this  it  will  be  seen  that  probably  $35,000,000,000  of 
capital  is  concentrated,  if  not  in  the  direct  physical  control  of 
men  of  this  group,  yet  in  such  disposition  as  to  be  sympathet- 
ically under  their  dominance.  Any  movement  which  they 
initiate  will  be  followed  by  the  momentum  of  that  much  capital, 
and  in  opposition  will  only  be  found  a  much  smaller  amount  of 
capital,  in  diversified  control,  acting  at  haphazard  and  in  com- 
petition.    The  large  bodies  of  capital  being  directed  as  units 


PRIVATE  MONOPOLY 


75 


by  men  of  greater  experience  and  power,  must  inevitably  swal- 
low up  the  smaller  units. 

Wliat  proportion  their  control  amounts  to  of  the  whole  wealth 
of  the  country  can  be  seen  from  the  following  table: 

According  to  a  Special  Report  of  the  Census  Office,  1907,  the 
Estimate  of  National  Wealth  is: 


Form  of  Wealth 


Total  $107,104,192,410 


1904 


Real  property  and  improvements  taxed 
Real    property    and    improvements    ex- 
empt   

Live  stock   

Farm  implements  and  machinery 

Manufacturing    machinery,    tools    and 

implements    

Gold  and  silver  coin  and  bullion 

Railroads  and  their  equipment 

Street  railways,  etc. 

Street   railways    

Telegraph  systems   

Telephone  systems   

Pullman  and  private  cars 

Shipping   and  canals    

Privately  owned  waterworks 

Privately   owned   central   electric   light 

and  power  stations   

All  other: 

Agricultural  products 

Manufactured   products    

Imported  merchandise    

Mining   products    

Clothing  and  personal  adornments 


Furniture, 
property 


and     kindred 


55,510,228,057 

6,831,244,570 

4,073,791,736 

844,989,863 

3,297,754,180 

1,998,603,303 

11,244,752,000 

2,219,966,000 
227,400,000 
585,840,000 
123,000,000 
846,480,804 
275,000,000 

562,851,105 

1,899,379,652 

7,409,291,668 

495,543,685 

408,066,787 

2,500,000,000 

5,750,000,000 


1900 


$88,517,306,775 


46,324,839,234 

6.212,788,930 

3,306,473,278 

749,775,970 

2,541,046,639 
1,677,379,825 
9,035,732,000 

1,576,197,160 
211,650,000 
400,324,000 
98,836,600 
537,849,478 
267,752,468 

402,618,653 

1,455,069,323 

6,087,151,108 

424,970,592 

326,851,517 

2,000,000,000 

4,880,000,000 


The  enormous  degree  of  control  exercised  by  the  groups  of 
Wall  Street  financiers,  directly,  and  more  particularly  through 
sympathetic  control,  may  be  understood  when  the  organization 
of  Wall  Street  is  considered. 

In  Wall  Street  are  collected  a  large  body  of  brokers  who  make 
it  their  business  to  be  in  touch  with  all  the  pereons  of  means 
in  the  United  States  who  have  money  to  invest. 

These  brokers  have  the  confidence  of  their  cleints,  and  when 
capital  is  wanted  for  a  new  enterprise  one  of  the  great  finan- 


76  THE  PRICE  OF  INEFFICIENCY 

ciers  underwrites  the  issue  of  stock;  that  is,  he  agrees  to  sell 
it  at  a  certain  price  or  over,  or  to  buy  all  that  he  does  not  dis- 
pose of.  He  receives  a  certain  percentage  for  thus  guaranteeing 
the  sale  of  the  stock,  called  his  underwriting  fee. 

He  is  merely  a  wholesaler  of  confidence,  because  he  simply 
apportions  out  among  the  brokers  certain  amounts  of  the  stock, 
which  they  agree  to  sell  to  their  clients.  They  also  receive  a 
certain  percentage.  Thus  they  participate  in  the  underwrit- 
ing. They  are  the  retailers  of  the  stock,  the  great  financier 
being  the  wholesaler  of  the  whole  amount. 

The  prestige  of  the  financier  and  the  confidence  which  the 
clients  have  in  the  brokers,  results  in  the  prompt  sale  of  the 
stock  with  a  large  profit  to  all  concerned ;  and  the  new  body  of 
capital  put  into  the  new  enterprise,  though  the  stock  is  owned 
by  scattered  holders,  is  yet  sympathetically  controlled  by  the 
financier,  as  the  brokers  will  advise  their  clients  to  vote  the 
stock  as  the  financier  wishes.  This  they  invariably  do,  for  the 
financier  has  retained  a  large  block  of  the  stock,  as  have  the 
original  promotors  of  the  company,  and  the  small  holders  feel 
that  they  will  manage  the  company  in  its  best  interests  on  ac- 
count of  their  holdings. 

The  capital,  however,  which  has  thus  been  withdrawn  from 
all  parts  of  the  country,  to  form  a  new  trust  which  operates 
in  all  parts  of  the  country,  but  which  is  controlled  in  New  York, 
buys  out  or  destroys  local  concerns,  which,  if  the  trust  had  not 
been  formed,  would  have  continued  to  prosper  and  been 
strengthened  by  the  local  capital  going  directly  into  them  in- 
stead of  going  to  New  York  to  be  partially  absorbed  by  the 
brokers  in  process.  Monopoly  thus  takes  the  place  of  competi- 
tion. 

And  the  great  financiers  keep  a  close  watch  on  the  financial 
pulse  of  the  public,  new  corporations  being  formed  or  the  cap- 
ital of  old  ones  increased  rapidly  enough  to  keep  absorbed  as 
much  as  possible  of  the  new  wealth  coming  into  existence 
throughout  the  country. 

The  central  group  of  capitalists,  too,  have  great  power 
through  the  control  of  the  savings  and  profits  of  the  various 
companies  they  control,  only  a  part  of  which  goes  out  in  divi- 
dends. What  this  amounts  to  is  seen  from  the  following  table, 
taken  from  figures  given  in  Poor's  Manual  and  published  in 
McClure's  Magazine. 


PRIVATE  MONOPOLY  77 

CASH    HOLDINGS   OF   KAILROAD  AND    INDUSTRIES    UNDER   NEW   YORK 

CONTROL. 

Railroad  Large  Industrials  Total 

1880    $  11,281,626  $  11,281,626 

1890    51,872,152  $17,468,090  69,340,242 

1900    160,561,81 1  46,536,909  207,098,720 

1909-10 640,545,178  267,337,175  907,882,353 

"The  larger  part  of  this  money  lies  in  the  control  of  the  men 
whose  great  monopolies  have  grown  to  overshadow  all  the  rest. 
Together  with  it,  they  hold  in  absolute  ownership  individual 
fortunes  of  their  own,  running  from  fifty  to  four  hundred  mil- 
lion dollars,  and  the  alliance  with  the  fortunes  and  resources 
of  the  many  lesser  men — their  associates  and  dependents. 
This  money  power  completes  their  control  over  the  corporate 
capital  of  the  country — invested  and  uninvested.  They  own, 
together  or  apart,  a  controlling  stock  interest  in  the  dominating 
industries  of  the  country;  they  hold  control,  through  these  and 
other  means,  of  industry  as  a  whole;  and,  finally,  they  hold 
control  of  the  capital  which  is  yet  to  be  spent  for  the  use  of 
the  great  corporate  enterprises  of  the  United  States." 

"While  the  stock  of  these  corporations  is  distributed  to  a  cer- 
tain extent,  it  is  only  among  the  wealthy  class  of  the  population 
of  the  United  States.  This  is  shown  by  the  fact  that  the  stock 
for  the  most  part,  is  in  shares  of  $100  par  value,  while  the 
bonds  are  in  units  of  $1,000.  If  the  stock  were  widely  dis- 
tributed among  the  general  public,  there  would  be  a  class  of 
brokers  dealing  in  small  lots  of  stock  from  one  to  five,  ten  and 
fifty  shares.  In  the  parlance  of  Wall  Street,  anything  less 
than  100  shares  or  $10,000  par  value  of  stock,  is  called  an  "odd 
lot."  Certain  brokers  on  the  Stock  Exchange  make  a  specialty 
of  odd  lot  business,  but  the  number  of  brokers  who  are  special- 
ists of  this  kind  is  very  limited,  an  almost  negligible  proportion 
of  the  whole  membership,  the  great  majority  of  brokers  dealing 
only  in  blocks  of  100  shares,  though  they  purchase  for  clients 
odd  lots  when  requested.  Speculation  on  margin  is  almost 
wholly  in  the  100  share  lots  and  over,  though  there  is  a  smaller 
exchange  which  trails  along  after  the  big  one,  in  which  specula- 
tion in  10  share  lots  on  margin  is  carried  on  to  a  limited  extent. 

What  is  called  the  general  public,  that  is  the  small  investor 
who  has  $1,000  or  less  to  invest,  usually  buys  a  mining  stock 
of  $1  par  value,  in  preference  to  the  securities  of  the  great  cor- 
porations. 


78  THE  PRICE  OF  INEFFICIENCY 

A  further  proof  of  the  concentration  of  wealth  lies  in  the 
fact  that  a  close  estimate  of  the  whole  number  of  stockholders 
in  the  principal  corporations  is  hardly  more  than  600,000,  of 
which  somewhat  less  than  half  hold  railroad  stock,  while  a  large 
proportion,  owning  stock  in  several  different  corporations  are 
counted  more  than  once  in  such  a  summary. 

According  to  the  wealth  statistics  of  the  tenth  census,  3%  of 
the  American  people  own  20%  of  the  wealth,  9%  own  51% 
of  the  wealth  while  88%  of  the  people  own  but  29%  of  the 
wealth. 

In  Germany,  however,  only  2%  of  the  wealth  is  held  by  the 
wealthier  classes  while  54%  is  held  by  the  middle  and  44%  by 
the  lower  classes. 

AVhat  the  concentration  of  wealth  in  the  United  States  means 
is  seen  when  the  total  national  wealth  of  the  two  countries  is 
compared.  That  of  Germany  is  45,000  millions  of  dollars  and 
that  of  the  United  States,  as  shown,  107,000  millions  of  dol- 
lars. 

The  vast  accumulation  of  wealth  thus  in  a  few  hands  takes 
on  a  new  significance  when  its  international  effects  are  consid- 
ered. 

Dr.  Franz  Ehrich  Junge-Hermsdorf,  in  the  Engineering  Mag- 
azine, has  presented  this  phase  of  the  question  most  admirably: 
"If  we  admit  that  capital  in  its  lesser  accumulation  has  been 
and  is  conducive  to  national  progress — progress  which  must  in- 
clude, besides  the  physical  and  intellectual,  also  the  moral  up- 
lift of  man — why  does  it  become  dangerous  and  tyrannical 
and  harmful  to  the  country  when  concentrated  in  a  few  irre- 
sponsible hands? 

"There  can  be  no  doubt  that  capital  and  capitalism,  based  as 
it  is  on  the  institution  of  private  property,  has  done  an  enor- 
mous lot  of  good  to  the  commonwealth,  as  long  as  it  concen- 
trated its  activities  within  the  national  borders,  serving  to  mul- 
tiply the  values  of  the  native  soil.  But  when  capital  started  to 
flow  bej^ond  the  borders  of  its  natural  vessel — where  it  can  be 
cheeked  by  competent  authority,  and  where  righteous  govern- 
ments can  direct  its  course  to  the  best  ends  of  all — and  when 
it  started  to  combine  with  other  streams  of  overflowing  wealth 
from  other  countries,  capital  became  a  wild  torrent  of  formid- 
able force,  an  international  power,  whose  movements  are  fever- 
ish and  uncertain  and  can  no  longer  be  guided  by  established 
national  authorities.     Nor  are  they  balanced  by  weight  of  inter- 


PRIVATE  MONOPOLY  79 

national  agreement,  because  there  is  no  arbitrary  power  strong 
enough  to  enforce  conciliatory  measures,  and  none  elevated 
enough  to  enjoy  general  recognition.  International  capital  is 
its  own  arbiter,  it  is  responsible  to  no  one,  and  its  supreme  lex 
is  to  grow  and  multiply,  ignoring  sentimental  considerations. 

''Says  William  Howard  Taft:  'A  gigantic  controversy  be- 
tween capital  and  labor  ^^'ill  decide  once  for  all  how  capital 
and  labor  shall  share  the  joint  profits  which  they  create.' 
From  our  analysis  of  the  situation,  it  will  be  more  a  fight  be- 
tw»een  the  legitimate  power  of  national  governments,  repre- 
senting the  interests  of  the  masses,  and  the  arrogated  power  of 
international  capital,  representing  the  interests  of  the  favored 
few. 

"There  is,  indeed,  a  closer  affinity  of  aims,  a  firmer  alliance 
of  action,  traceable  to-day,  between  the  great  industrial  trusts 
of  the  different  countries,  preying  jointly  upon  the  world's 
markets,  than  there  is  co-operation  existing  between  various 
social  strata  of  one  and  the  same  country.  The  world  is  be- 
coming an  open  shop,  owned  by  the  international  association  of 
manufacturers.  National  borders  disappear,  and  with  them  all 
the  loftiest  motives  for  which  they  stood. 

"But  it  is  not  only  the  subjugation  of  national  ideals  to  in- 
ternational aims  that  is  so  much  to  be  feared,  but  the  fact  that 
a  small  group  of  selfish  men  is  able  to  swing,  not  only  the  fac- 
tor of  capital,  but  also  the  factor  of  government,  setting  up 
nation  against  nation,  and  hearthstone  against  hearthstone. 

"Here  is  an  illustration  of  this  disastrous  tendency  as  it 
exliibits  itself  in  the  commercial  dealings  of  this  very  day.  A 
small  group  of  American  capitalists,  known  under  the  name 
of  the  'North  Trust,'  attempted  in  times  of  disorganization  of 
the  German  market  to  buy  up  one  of  the  fundamental  re- 
sources of  that  country,  making  private  contracts  for  the  supply 
of  320,000  tons  of  potash  per  annum,  on  five  years'  option; 
thereby  they  could  gain  control  of  the  American  market,  where 
about  360,000  tons  are  consumed  annually,  thus  establishing  a 
practical  monopoly  in  restraint  of  trade. 

"And  this  same  trust  is  attempting,  further,  to  engage  and 
play  the  American  government  against  the  German  govern- 
ment, because  the  latter  has  enacted  a  law  (long  ago  planned 
and  announced  to  the  State  department  at  Washington),  which 
purports  by  the  establishment  of  a  national  syndicate,  to  pre- 
vent over-production  of  potash  and,  for  the  benefit  of  the  small 


80  THE  PRICE  OF  INEFFICIENCY 

producer,    prohibits    squandering    irreplaceable    resources,    of 
which  Germany  has  no  plethora. 

"It  is  a  most  reckless  game  of  concentrated  capital,  and  one 
which  cannot  be  too  severely  rejected  before  the  forum  of  pub- 
licity—this attempt  to  endanger  and  disturb  the  friendly  rela- 
tions between  two  great  peoples  for  the  sole  benefit  of  establish- 
ing an  artificial  monopoly  on  some  such  commodity  and  reaping 
the  excessive  profits  from  its  sale.  But  it  is  an  instance  which 
shows  clearly  that  national  communities  must  not  let  the  con- 
trol of  capital  slip  from  their  hands,  lest  international  compli- 
cations of  the  gravest  consequences  arise,  for  which  corporate 
capital  will  not  and  cannot  be  held  responsible. 

"It  is  the  tragedy  of  our  age,  the  way  this  artificial  creature 
of  capitalism,  in  its  ubiquity,  can  forever  escape  the  single 
justice  which  the  natural  individual  must  face.  And  it  is  the 
duty  of  every  patriotic  man,  within  the  borders  of  his  country, 
to  see  that  tlie  rule  of  capital  is  once  for  all  subjected  to  the 
rule  of  government,  viz:  to  the  collective  force  of  civic  virtue 
evolved  in  centuries  of  nation  building." 

In  what  ways  this  is  to  be  accomplished  is  the  great  problem 
of  American  life  to-day,  and  it  is  likely  to  continue  the  dom- 
inant problem  for  many  years.  It  has  not  arisen  in  a  day. 
As  John  Moody  and  George  Kibbe  Turner  in  McClure's  Mag- 
azine say: 

"This  central  group  is  a  perfectly  natural  evolution — the 
final  product  of  thirty  or  forty  years  of  unchecked  movement 
towards  monopoly.  It  has  not  been  erected  by  any  man's  or 
men's  arbitrary  acts  or  theories.  It  has  risen  day  after  day 
and  year  after  year  upon  the  progressive  bankruptcy  of  gen- 
eral industry  under  competition.  The  old  economic  axiom  has 
been  erased  in  the  last  twenty-five  years;  competition  has  not 
been  the  life  of  trade ;  it  has  been  the  death  of  industry  in  the 
United  States.  Monopoly  has  been  built  up  on  its  ruins,  and 
it  is  built  to  stay." 

The  United  States  is  by  no  means  alone  in  its  struggle  against 
American  trusts.  The  Standard  Oil  Company,  one  of  its  most 
complete  monopolies,  has  been  gradually  reaching  out  for  the 
oil  trade  of  Germany  until  a  most  acute  situation  has  arisen. 

Dr.  Paul  Schwartz,  editor  of  Petroleum,  the  official  organ 
of  the  German  oil  trade,  who  has  for  years  carried  on  a  crusade 
against  the  Standard  and  who  has  frequently  been  consulted 
by  the  German  government  as  to  the  best  ways  and  means  of 


PRIVATE  MONOPOLY  81 

fighting  the  trusts  says  in  an  interview  in  the  New  York  Times 
of  Oct.  20,  1912 : 

''The  cries  of  distress  which  for  months  have  been  sent  up 
by  our  oil  trade  could  no  longer  be  ignored.  It  was  not  a  ques- 
tion of  the  price  of  oil.  There  was  no  complaint  from  con- 
sumers on  that  score. 

"The  reason  the  government  has  been  moved  to  take  the 
drastic  action  of  establishing  a  monopoly  is  that  the  Standard 
is  throttling  the  life  out  of  thousands  of  German  citizens,  who 
are  deprived  of  the  possibility  of  longer  conducting  an  inde- 
pendent, self-respecting  business  in  their  own  trade.  They  find 
themselves  reduced  to  economic  serfdom.  Men  who  once  had 
prosperous  little  oil  businesses  of  their  own  have  now  the  al- 
ternative of  becoming  drivers  of  the  oil  wagons  owned  by  the 
Standard.  They  are  asked  to  come  down  from  the  rank  of 
business  men  to  the  level  of  peddlers. 

"This  is  the  state  of  affairs  to  which  the  Standard's  highly 
organized  campaign  has  reduced  our  oil  trade.  Their  so-called 
can  business  has  been  developed  to  a  point  where  they  reach 
practically  every  individual  consumer  at  his  own  threshold. 

"By  a  system  of  speeding  up  the  local  representatives 
through  its  offers  of  premiums,  the  Standard  has  spread  its  nets 
so  thoroughly  that  no  competition  can  any  longer  stand  against 

it. 

"The  Standard  has  taken  the  map  of  Germany  and  staked 
the  entire  empire  out  as  its  own  particular  claim.  No  hamlet 
is  too  small  to  merit  the  octopus's  attention.  The  result  has 
inevitably  been  the  destruction  of  the  small  dealer. 

"Although  itself  the  classic  land  of  organization,  Germany  is 
not  accustomed  to  such  methods  in  the  pursuit  of  business. 
This  sort  of  Americanization  is  offensive  to  our  ethical  suscep- 
tibilities, quite  apart  from  the  economic  ruin  it  brings  to  thou- 
sands. 

"Our  people  and  government  have  for  years  been  bom- 
barded from  all  quarters  for  remedial  measures.  It  had  no 
longer  any  recourse  but  to  proceed  by  the  furthest-reaching 
means  at  its  command  to  rid  the  country  of  a  system,  which 
was  eating  the  heart  of  the  economic  body. 

The  future  development  of  monopoly  and  accumulated  cap- 
ital is  an  ominous  question.  Not  only  in  the  mere  power  of 
capital  lies  the  danger,  but  in  its  vast  psychological  effect,  the 
sharp  contrast  between  the  citizen  of  smaU  or  average  means, 


82  THE  PRICE  OF  INEFFICIENCY 

and  the  wealth  of  the  rich,  places  a  gulf  between  them,  creating 
class  distinctions  and  antagonisms  which  are  fatal  to  the  spirit 
of  democracy. 

The  possibility  will  be  present  of  a  financial  genius  arising, 
a  Napoleon  of  finance,  and  merging  under  a  single  control  all 
this  vast  capital.  Such  a  man  would  wield  a  power  never  be- 
fore exercised.  He  could  make  or  unmake  legislators,  judges, 
presidents;  he  could  unite  countries  into  new  nations  or  dis- 
I'upt  political  divisions,  and  if  allied  to  his  genius  for  money, 
he  had  genius  for  politics  and  ambitions  for  power,  he  might 
even  become  a  dictator,  the  first  sole  ruler  of  the  modern  world. 
While  such  a  possibility  is  remote,  yet  America  has  taken  gi- 
gantic strides  in  the  century  and  a  third  of  its  existence,  and 
it  is  not  beyond  the  probabilities  that  another  century  may 
bring  such  a  problem  up ;  that  even  now,  the  coming  money  king 
may  be  an  infant  in  arms  or  a  child  at  play. 

Such  a  contingency  would  be  impossible  did  the  texture  and 
composition  of  the  American  people  remain  of  its  present  qual- 
ity; but  such  a  continuance  is,  however,  gravely  in  hazard. 
The  last  decade  or  two  has  witnessed  a  serious  impairment  of 
American  standards  due  to  the  hordes  of  a  new  immigration, 
and  should  this  continue  unchecked  and  unassimilated,  a  cen- 
tury would  see  America  dominated  by  a  people  of  characteris- 
tics so  different  from  our  own  as  to  be  unable  or  disinclined  to 
preserve  the  bulwarks  of  liberty  erected  with  such  sacrifices 
by  your  ancestors.  As  will  be  pointed  out  in  later  chapters,  in 
relative  standing  with  other  countries  the  United  States  is  far 
from  holding  the  position  it  held  twenty  years  ago.  It  is  con- 
stantly losing  ground,  the  poor  getting  poorer,  the  rich  getting 
richer,  and  the  middle  class  disappearing,  and  unless  the  proc- 
ess is  arrested,  American  institutions  as  we  know  them  wiU 
pass  into  history. 


CHAPTER  VIII 
GOVERNMENTAL  SOCIALISM 

The  tyranny  of  the  single  seller — How  inventions  multiply  the  earth's 
population — Consolidated  robbery — Rapacity  of  modern  combinations 
— The  logic  of  governmental  price  regulation — An  embryonic  function 
— What  governments  are  really  for — Public  and  private  functions  of 
governments — What  governments  cost  and  what  they  do  for  the  money 
— 'The  Interstate  Commerce  Commission — Its  effective  methods — Rail- 
roads no  longer  the  pawns  of  business — Status  of  governmental  price 
regulation — The  hazardous  step  of  governmental  ownership — Govern- 
mental socialism  as  an  economic  necessity — Growing  powers  of  public 
service  commissions — Government  by  executive  order — Qualitative  reg- 
ulation of  food  products — Success  of  experiments  in  governmental 
socialism — Where  enliglitened  self-interest  breaks  down — Cicero  on 
socialism — What  socialism  is — What  it  proposes  to  do — Elimination 
of  the  middleman  or  the  cost  of  selling — How  competition  oppresses 
the  worker. 

In  earlier  times  and  under  simpler  conditions  of  life,  com- 
petition was  the  only  safeguard  which  the  purchaser  needed, 
but  under  the  complex  regime  of  modern  life,  the  limitations 
of  competition  have  been  exceeded,  and  the  purchaser  has  fallen 
a  victim  to  the  ravaging  self-interest  of  the  sole  seller. 

The  new  condition  has  been  created  by  invention,  not  by  any 
change  in  human  nature.  The  activity  of  inventors,  due  to  the 
establishment  of  patent  offices  and  the  recognition  of  their  rights 
to  their  inventions  for  limited  terms,  has  done  more  to  revo- 
lutionize the  world  than  any  other  single  factor. 

The  invention  of  the  harvesting  machine  made  bread  vastly 
cheaper,  with  the  result  that  the  population  of  the  world  in- 
creased far  beyond  what  would  have  been  possible  with  previous 
expensive  methods  of  wheat  harvesting. 

Every  invention  which  saves  time  has  the  effect,  sooner  or 

later,  of  increasing  the  population  of  the  world,  and  in  addition 

of  increasing  the  comfort  of  its  inhabitants.     Once  the  majority 

of  people  went  barefooted  a  greater  part  of  the  year.     Now, 

through  perfections  of  shoe  making  machinery,  shoes  have  come 

to  be  so  cheap  that  everyone  wears  them  the  whole  year  around. 

83 


84  THE  PRICE  OF  INEFFICIENCY 

The  invention  of  the  steam  locomotive  so  reduced  the  cost  of 
transportation  that  journeys  thousands  of  miles  may  be  taken 
where  hundreds  were  traversed  before. 

But  while  invention  has  bestowed  benefits,  it  has  involved 
consequences.  Where  formerly  several  stage  coach  drivers  were 
in  competition  over  the  same  road,  there  is  now  one  road  of  steel. 
The  stage  coach  has  become  an  impossibility  and  competition 
likewise  an  impossibility.  In  effect,  the  stage  coach  proprietors 
sold  their  coachs  and  built  a  railroad.  One  became  the  engineer, 
one  the  fireman,  one  the  conductor,  one  the  station  agent,  and 
collectively  they  carried  more  passengers  than  they  could  have 
done  in  competition. 

They  waxed  so  rich  in  fact,  that  they  all  became  officers  of  the 
company  and  hired  employees  to  do  their  former  tasks.  Where 
once  there  had  been  competition,  the  invention  of  the  steam 
railway  brought  about  monopoly,  with  all  the  factors  working 
together  against  the  purchaser  of  transportation,  that  had  once 
been  in  competition. 

The  self  interest  of  the  proprietors  of  the  railroad  had  nothing 
to  check  it.  For  generations  they  charged  "all  that  the  traffic 
would  bear,"  and  kept  up  a  clamor  about  the  benefits  of  private 
ownership  and  the  sacred  benefits  of  competition. 

Only  within  recent  years  has  the  public  realized,  and  acted 
on  the  realization,  that  where  competition  has  been  eliminated 
some  other  form  of  regulation  must  be  supplied.  The  public 
must  travel,  must  buy  transportation  and  yet  there  is  no  divine 
right  given  to  the  proprietors  to  charge  "all  the  traffic  will 
bear." 

It  is  impracticable  and  impossible  for  the  individual  to  supply 
the  regulation  necessary.  But  the  individual,  in  his  collective 
capacity,  a  government,  has  just  as  much  right  to  refuse  to  pay 
"all  the  traffic  will  bear"  as  the  proprietors  in  their  collective 
capacity  as  the  company  have  to  demand  it. 

Governmental  regulation  is  thus  the  first  and  logical  step  after 
the  boundaries  of  competition  are  passed.  It  is  not  necessary 
that  the  individuals  as  a  government  should  purchase  the  rail- 
road. Their  whole  desire  is  transportation  at  fair  rates.  Com- 
pared with  governmental  regulation,  governmental  ownership 
is  a  revolutionary  step. 

Beyond  competition,  however,  a  choice  must  be  made,  the  ra- 
pacity of  self  interest  must  be  cheeked,  and  it  has  been  found 
that  the  choice  of  governmental  regulation  is  thus  in  theory  not 


GOYERNIMENTAL  SOCIALISM  85 

only  the  best  expedient,  but  that  in  practice  it  works  out  better 
than  anything  that  has  been  attempted. 

The  regulation  of  price,  however,  is  a  governmental  function 
that  has  never  been  employed  to  any  great  extent  as  yet.  For 
some  reason  there  appears  to  be  considerable  public  sentiment 
in  opposition  to  it.  It  is  practically  an  unused  power  of  the 
government,  yet  when  exercised  it  affects  the  individual  no  more 
directly  than  various  other  governmental  activities. 

In  classifying  the  activities  and  transactions  of  a  nation,  state 
or  municipality,  students  of  economics  divide  them  into  two 
different  types;  general  functions  and  commercial  functions,  a 
classification  adopted  by  the  Federal  census,  which  in  a  special 
report  analyses  the  governmental  functions  in  a  most  interesting 
manner,  as  follows: 

"The  general  functions  of  nation,  state  and  municipality  are 
those  which  are,  as  a  rule,  performed  for  all  citizens  alike,  with- 
out any  attempt  to  measure  the  benefit  conferred  or  the  exact 
compensation  therefor,  the  expenses  being  met  by  revenue  ob- 
tained principally  from  compulsory  contributions  levied  without 
regard  to  the  benefit  which  the  individual  contributor  may  de- 
rive from  any  or  all  governmental  activities. 

* '  Most  functions  of  this  class  are  essential  to  the  existence  and 
development  of  government  and  to  the  performance  of  the  gov- 
ernmental duty  of  protecting  life  and  property  and  of  main- 
taining a  high  standard  of  social  efficiency. 

"Chief  among  those  activities  are  those  of  general  govern- 
ment; the  protection  of  life,  health  and  property;  the  care  of 
the  defective,  delinquent  and  dependent  classes;  the  education 
of  the  young,  and  the  perfonnance  of  other  duties  of  a  similar 
nature;  the  purchase  of  land  for  government  buildings,  parks 
and  streets;  the  erection,  equipment  and  management  of  state 
capitols,  country  courthouses,  city  halls  and  other  buildings  for 
general  governmental  uses ;  the  purchase  or  construction  of  elec- 
tric light  and  gas  works  for  the  exclusive  purpose  of  lighting 
the  streets  and  governmental  buildings,  and  of  other  structures 
and  plants,  such  as  printing  offices,  police  and  fire  telephone 
systems  and  bridges;  for  furnishing  free  of  charge  any  com- 
modity or  service  required  by  the  government  in  the  common 
interest  of  all  its  citizens.  In  the  same  categoiy  are  included 
the  opening,  grading,  paving  and  curbing  of  streets,  and  the 
construction  of  drains  and  sewers,  where  such  public  improve- 
ments are  made  at  public  expense  without  conferring  upon  par- 


86  THE  PRICE  OF  INEFFICIENCY 

ticular  individuals  measurable  special  benefits  for  which,  in  the 
opinion  of  the  proper  authorities,  compensation  should  be  ex- 
acted by  the  government.  To  the  same  general  group  belong 
the  making  and  paying  of  loans  and  the  payment  of  interest 
thereon,  where  such  loans  are  made  in  connection  with  the  other 
activities  and  transactions  mentioned. 

"The  general  functions  of  nations,  states  and  municipalities 
may  be  classified  in  a  great  variety  of  ways,  according  to  the 
point  of  view  from  Avhich  considered.  The  primary  classifica- 
tion of  general  functions  of  municipalities  which  was  adopted 
by  the  Bureau  of  the  Census  is  based  upon  prior  studies 
of  the  subject  by  Prof.  Adolph  Wagner,  of  Germany,  set  forth 
in  his  Finanzwissenschaft,  and  revised  by  Prof.  Frederick  E. 
Clow  in  the  Quarterly  Journal  of  Economics  for  July,  1896. 
The  earlier  treatment  of  the  subject  by  American  economists 
was  ably  discussed  by  Prof.  L.  S.  Rowe  of  the  University  of 
Pennsylvania,  before  the  conference  of  the  National  Municipal 
League  in  1899. 

"As  a  result  of  these  studies  and  of  conferences  between 
accountants,  economists  and  others  connected  with  the  National 
Municipal  League,  that  organization  arranged  a  tentative  classi- 
fication which  was  made  the  basis  of  the  one  later  adopted  by 
the  Bureau  of  the  Census. 

"The  commercial  functions  of  a  state,  nation  or  municipality 
include  those  which  create  trade  relations,  industrial  or  semi- 
industrial,  between  the  nation,  state  or  municipality,  and  the 
general  public,  including  other  civil  divisions.  Among  the 
transactions  which  arise  from  the  exercise  of  such  functions  are 
those  involving  the  loan  of  public  money  at  interest,  the  use  of 
public  property  for  compensation,  the  sale  of  any  commodity 
or  article  of  commerce  or  the  performance  of  any  work  or  serv- 
ice for  pay. 

"All  these  transactions  involve  the  performance  of  some  serv- 
ice by  the  national,  state  or  municipal  government,  or  the  grant- 
ing of  some  favor  by  such  government,  for  special  compensa- 
tion, whether  the  favor  or  service  be  primarily  for  this  service 
or  favor,  or  for  the  revenue  to  be  secured;  none  of  them  is  es- 
sential to  the  existence  and  development  of  the  government, 
though  they  may  contribute  to  its  support." 

The  regulation  of  prices  charged  by  monopolies  is,  strictly 
speaking,  in  neither  of  these  classifications.  While  it  is  a  serv- 
ice rendered  by  the  government  for  the  benefit  of  the  public, 


GOYERmiENTAL  SOCIALISM  87 

it  is  not  strictly  a  general  function,  as  it  is  not  necessary  for  the 
development  of  the  government.  It  may  be  called,  in  short, 
governmental  socialism,  the  stopping  of  what  amounts  to  a  con- 
spiracy against  the  people  constituting  the  government,  by  the 
government  acting  in  their  interest. 

Being  an  innovation  and  the  exercise  of  a  power  not  hitherto 
called  into  use,  it  is  natural  that  much  opposition  should  be 
excited  against  it,  even  by  those  who  will  be  most  benefited. 

In  the  activities  which  may  be  included  under  the  term  of 
governmental  socialism,  the  United  States  has  only  recently 
taken  part,  though  the  field  entered  is  one  of  the  greatest,  and 
the  consequences  the  most  far  reaching  of  any  activity  of  this 
sort  which  could  be  undertaken. 

In  the  Interstate  Commerce  Commission,  which  regulates  rail- 
road freight  and  passenger  rates  and  even  the  system  of  ac- 
counting of  the  railroads,  in  order  that  regulations  may  be  uni- 
formly applied,  the  United  States  has  in  successful  operation 
one  of  the  most  extensive  and  practical  of  all  the  forms  of 
governmental  price  regulation. 

The  vast  savings  to  the  public  and  the  impartial  adjustment 
of  traffic  and  rates  has  made  the  Interstate  Commerce  Com- 
mission one  of  the  most  useful  bodies  ever  created. 

It  has  remained  free  from  accusations  of  partiality  and  graft 
and  enjoys  the  confidence  of  the  public,  the  shippers  and  the 
railroads. 

Indeed,  it  has  been  for  the  railroads  a  great  benefactor,  since 
it  has  relieved  them  of  a  great  deal  of  grafting  to  which  they 
were  subject  in  the  way  of  passes  and  other  favors,  which  it  had 
become  customary  to  grant  to  persons  of  influence  and  large 
shippers.  It  has  freed  the  railroads,  too,  of  the  necessity  of 
allowing  rebates  to  powerful  shippers,  and  while  advances  in 
rates  have  been  vetoed  by  the  commission,  the  uniformity  en- 
forced has  been  to  the  advantage  of  the  railroads  as  well  as  to 
the  public. 

Railroads,  as  railroads,  and  not  as  pawns  of  business,  prefer 
to  pay  no  rebates.  Except  in  cases  of  competition,  which  are 
rare,  the  railroad  is  not  the  initiator  of  the  rebate.  It  is  usually 
forced  to  give  the  rebate  by  some  powerful  shipper,  who  has 
connections  which  enable  him  to  dictate  his  own  terms  to  the 
railroad.  It  enforces  a  condition  of  equity  and  justice  which 
is  beneficial  to  all  concerned. 

No  suggestion  is  heard  of  abolishing  the  commission  or  even 


88  THE  PRICE  OF  INEFFICIENCY 

of  curtailing  its  powers,  nor  is  it  called  a  socialistic  body,  yet 
that  is  what  it  really  is.  Its  decisions  are  respected  and  in  im- 
portant eases  are  awaited  with  all  the  interest  which  attaches 
to  the  decisions  of  the  Supreme  Court  of  the  United  States. 

George  W.  Perkins,  formerly  a  partner  in  the  banking  firm 
of  J.  Pierpont  Morgan  &  Co.,  and  the  organizer  of  the  Harvester 
Trust,  a  man  who  started  with  nothing  and  who  is  now  many 
times  a  millionaire,  an  energetic,  picturesque,  breezy  and  cheer- 
ful, not  to  say  irrepressible,  millionaire  is  to-day  a  warm  ad- 
vocate of  the  idea  of  a  court  of  commerce  to  regulate  prices 
charged  by  trusts,  similarly  as  the  Interstate  Commerce  Com- 
mission adjusts  railroad  rates. 

In  the  World's  Work  for  June,  1911,  Mr.  Perkins  says: 

"Our  business  concerns  have  grown  from  the  local  firm  and 
the  state  company  to  the  great  interstate  corporations ;  and  what 
we  must  have  is  Federal  regulation  and  control  of  these  great 
interstate  business  enterprises,  and  we  must  have  laws  that 
will  punish  the  man  who  commits  the  crime,  not  the  stockholder 
or  the  public  which  is  being  served.  Federal  regulation  is  fea- 
sible, and  if  we  unite  and  work  for  it  now,  we  may  be  able  to 
secure  it;  whereas  if  we  continue  to  fight  against  it  much 
longer,  the  incoming  tide  may  sweep  the  question  along  either 
to  government  ownership  or  socialism.  The  day  has  come  when 
we  need  statesmanship  in  business  and  more  business-like  states- 
manship. 

"One  important  reason  why  business  men  have  feared  regu- 
lation of  business  by  the  government  has  been  that  such  regu- 
lation would  be  performed  by  inexperienced  men — those  without 
business  training,  who  would  have  no  practical  knowledge  of 
the  great  problems  involved, 

""We  now  have  at  Washington  a  Supreme  Court,  to  which 
is  referred  the  final  settlement  of  our  legal  questions.  This 
court  is  composed,  of  course,  of  la-wyers  only,  and  it  is  the 
dream  of  every  young  man  who  enters  the  law  that  he  may  some 
day  be  called  to  the  Supreme  Court  bench.  If  such  a  call  comes, 
it  matters  not  how  lucrative  his  practice,  he  always  drops  it  for 
the  honor  conferred.  Why  not  have  a  similar  goal  for  our  busi- 
ness men?  Why  not  have  a  court  for  business  questions,  on 
which  no  man  could  sit  who  had  not  had  a  business  training, 
with  an  honorable  record?  This  would  surely  come  to  be  re- 
garded by  business  men  in  the  same  way  that  the  Supreme 
Court  is  regarded  by  lawyers.     The  supervision  of  business  by 


GOVERNMENTAL  SOCIALISM  89 

such  a  body  of  men,  who  had  reached  such  a  court  in  such  a 
way,  would  unquestionably  be  fair  and  equitable  to  business, 
fair  and  equitable  to  the  public.  Furthermore,  it  would  not 
take  out  of  business  that  invaluable  asset,  individual  initiative. 
It  would  leave  the  everyday  management  of  business  imtram- 
meled  and  allow  men  free  swing  to  devise  ways  and  means  to 
improve,  enlarge  and  develop  our  domestic  and  foreign  com- 
merce." 

What  Mr.  Perkins  suggests  as  the  alternative  between  social- 
ism or  governmental  ownership,  is  a  form  of  what  we  term  gov- 
ernmental socialism. 

Another  important  phase  of  this  activity  is  seen  in  the  Pub- 
lic Service  Commissions  of  the  various  states,  and  in  the  spora- 
dic laws  of  the  various  states,  regulating  the  prices  of  trans- 
portation. 

The  New  York  State  Public  Service  Commission  (there  being 
two,  one  for  the  state  and  the  other  for  the  city  of  New  York) 
is  a  model  for  other  states.  Its  functions  are  the  regulations  of 
rates  of  railroads,  street  car  transportation,  their  service  and 
improvements,  bond  and  stock  issues,  and  gas,  electric  and  tele- 
phone matters.  It  has  in  addition  to  the  power  to  regulate 
rates,  very  great  powers  in  the  supervision  of  the  organization 
of  public  service  corporations  in  the  issuance  of  stocks  and 
bonds,  and  has  further  remarkable  powers  in  its  right  to  specify 
the  service  to  be  rendered,  such  as  the  number  of  cars  to  be  run, 
and  various  other  details,  which  in  effect  make  the  state  a 
superior  superintendent  of  operation.  Thus  the  state  has  by 
laAV  every  right  and  power,  practically,  that  it  would  have  under 
public  ownership,  aside  from  deriving  profit  from  the  enter- 
prise. It  prescribes  the  securities  which  may  be  issued,  the 
prices  to  be  charged,  and  the  service  to  be  rendered.  No  fuller 
powers  could  well  be  asked,  although  the  commission  as  yet  lacks 
the  power  to  have  its  orders  promptly  carried  out,  and  its  find- 
ings are  subjected  to  court  review. 

It  is  argiied  that  the  endowing  of  Public  Service  Commissions 
with  such  powers  is  an  illegal  delegation  of  the  powers  of  the 
legislature,  which  the  legislature  has  not  the  right  to  make.  It 
is  as  though  the  legislature  appointed  another  body  to  make 
laws  and  then  adjourned.  It  is  urged  that  this  is  government 
by  executive  order,  rather  than  by  law,  but  in  spite  of  these 
objections,  which  are  more  theoretical  than  real,  the  operations 
of  the  public  service  commissions  are  entirely  satisfactory  to 


90  THE  PRICE  OF  INEFFICIENCY 

the  public,  with  the  exception  that  they  are  not  as  yet  suffici- 
ently drastic  and  severe;  in  short,  the  criticism  is  that  the 
powers  are  not  used,  not  that  the  powers  exist. 

Like  the  Interstate  Commerce  Commission,  the  Public  Ser- 
vice Commissions  are  not  likely  to  be  dispensed  with.  It  is  a 
form  of  governmental  socialism  which  has  come  to  stay. 

While  the  government  has  not  as  yet  attempted  the  regulation 
of  the  rates  of  anything  except  public  service  corporations,  it 
has  undertaken  what  amounts  to  a  price  regulation  in  the  pure 
food  and  drug  laws.  The  thing  regulated  is  the  quality  of  the 
product,  and  while  this,  in  a  sense,  is  a  form  of  protection  of 
the  public  health,  it  is  also  indirectly  an  important  price  regu- 
lation, since  in  many  commodities  having  a  fixed  price  for  a 
fixed  unit,  the  improvement  in  quality  demanded  by  the  pure 
food  law,  is  a  cheapening  of  the  price  and  an  enforcement  of 
uniformity  in  price. 

In  the  provision  of  the  "net  contents  of  container,"  which, 
however,  has  not  as  yet  been  adopted,  another  price  regulation, 
in  force  abroad,  will  be  adopted,  since  the  marking  on  the  con- 
tainer of  the  net  weight  or  amount  of  the  contents  will  in 
effect  reduce  the  price  by  guaranteeing  a  certain  content,  while 
usually  the  package,  with  the  habitual  honesty  of  the  American 
manufacturer,  contains  something  under  the  supposed  con- 
tent. 

"While  this  represents  the  most  that  has  as  yet  been  done  in 
the  United  States  in  governmental  socialism,  it  should  be  noted 
that  it  has  been  uniformly  successful,  that  vast  powers  have 
been  exercised  for  the  benefit  of  the  public  and  with  even  greater 
benefit  to  the  corporations  than  the  most  "enlightened  self-in- 
terest" that  they  were  previously  able  to  exliibit,  and  more 
particularly,  that  the  result  has  been  accomplished  without 
graft  and  in  an  expeditious  and  effective  manner. 

Yet  the  commissioners  have  been  but  men,  no  different  from 
other  men.  The  system,  however,  is  superior  to  other  forms  of 
governmental  systems,  since  the  great  powers  of  the  commission 
have  caused  the  members  to  feel  a  sense  of  responsibility  to  the 
public,  rather  than  the  sense  of  responsibility  to  their  own 
pockets  so  often  manifested  by  aldermen.  The  intense  scrutiny 
to  which  their  acts  are  subjected,  and  the  prestige  of  their  posi- 
tions have  rendered  this  form  of  governmental  activity  one  from 
which  the  best  results  have  been  achieved. 

So  efficient,  indeed,  has  the  commission  form  of  government 


GOVERNMENTAL  SOCIALISM  91 

been  found,  that  it  is  being  adopted  by  various  cities  through- 
out the  United  States  and  is  proving  one  of  the  greatest  politi- 
cal movements  of  the  century.  A  further  reference  is  made 
to  it  in  a  later  chapter.  Socialism  is  a  mantle  which  is  ascribed 
to  a  diversified  throng  of  wearers.  It  does  duty  for  a  vast 
number  of  isms,  and  many  arise  to  proclaim  its  meaning.  To 
one  man  it  means  one  thing,  to  another  another,  but  for  all, 
it  is  at  once  a  protest  and  a  panacea. 

Cicero  described  what  socialism  really  is,  better  perhaps  than 
any  modern  expounder  when  he  said : 

' '  One  thing  ought  to  be  aimed  at  by  all  men ;  that  the  interest 
of  each  individually,  and  of  all  collectively,  should  be  the  same ; 
for  if  each  should  grasp  at  his  individual  interest,  all  human 
society  will  be  dissolved." 

Socialism  should  be  a  condition  which  answers  Cicero's  in- 
junction. 

Sir  Thomas  IMore  also  clearly  described  modern  conditions, 
the  only  cure  for  which  socialism  claims  to  be. 

Robert  Blatchford  in  his  famous  book  on  socialism,  ''Merrie 
England,"  a  book  which  has  had  an  enormous  sale  and  which 
merits  the  attention  of  every  thoughtful  reader,  has  prefaced 
his  chapter  on  "Socialism"  with  the  quotation  from  Cicero  and 
with  Sir  Thomas  More's  prophecy,  the  latter  of  which  is  as 
follows : 

"When  I  balance  all  these  things  in  my  thoughts,  I  grow 
more  favorable  to  Plato,  and  do  not  wonder  that  he  resolved  not 
to  make  any  laws  for  such  as  would  not  submit  to  a  community 
of  all  things!  for  so  wise  a  man  could  not  but  foresee  that  the 
setting  all  upon  a  level  was  the  only  way  to  make  a  nation 
happy,  which  cannot  be  obtained  so  long  as  there  is  property ; 
for  when  every  man  draws  to  himself  all  that  he  can  compass 
by  one  title  or  another,  it  must  needs  follow  that  how  plentiful 
soever  a  nation  may  be,  yet  a  few  dividing  the  wealth  of  it 
among  themselves,  the  rest  must  fall  into  indigence.  So  that 
there  will  be  two  sorts  of  people  among  them  who  deserve  that 
their  fortunes  should  be  interchanged,  the  former  useless  but 
wicked  and  ravenous,  and  the  latter,  who  by  their  constant 
industry  serve  the  public  more  than  themselves,  sincere  and 
modest  men.  From  whence  I  am  persuaded  that  till  property 
is  taken  away  there  can  be  no  equitable  or  just  distribution  of 
things,  nor  can  the  world  be  happily  governed;  for,  so  long  as 
that  is  maintained,  the  greatest  and  the  far  best  part  of  man- 


92  THE  PRICE  OF  INEFFICIENCY 

kind  will  be  still  oppressed  with  a  load  of  cares  and  anxieties." 

Mr.  Blatchford  continues  in  part,  describing  socialism: 

"Before  I  tell  you  what  socialism  is,  I  must  tell  you  what 
socialism  is  not.  For  half  our  time  as  champions  of  socialism 
is  wasted  in  denials  of  false  descriptions  of  socialism;  and  to  a 
large  extent,  the  anger,  the  ridicule,  and  the  argument  of  the 
opponents  of  socialism  are  hurled  against  a  socialism  which  has 
no  existence  except  in  their  own  heated  minds. 

"Socialism  does  not  consist  in  violently  seizing  upon  the 
property  of  the  rich  and  sharing  it  among  the  poor. 

"Socialists  do  not  propose,  by  a  single  act  of  parliament,  or 
by  a  sudden  revolution,  to  put  all  men  on  an  equality,  and  com- 
pel them  to  remain  so.  Socialism  is  not  a  wild  dream  of  a 
happy  land,  where  the  apples  will  drop  off  the  trees  into  our 
open  mouths,  and  the  fish  come  out  of  the  rivers  and  fry  them- 
selves for  dinner,  and  the  looms  turn  out  ready  made  suits  of 
velvet  with  golden  buttons  without  the  trouble  of  coaling  the 
engine.  Neither  is  it  a  dream  of  a  nation  of  stained  glass 
angels,  who  never  say  damn,  who  always  love  their  neighbors 
better  than  themselves,  and  who  never  need  to  work  unless 
they  wish  to. 

"  No,  socialism  is  none  of  these.  It  is  a  scientific  scheme  of 
national  government,  entirely  wise,  just  and  practical.  And 
now  let  us  see. 

"For  convenience  sake,  socialism  is  generally  divided  into 
two  kinds.  These  are  called — 1.  Practical  Socialism.  2.  Ideal 
Socialism. 

"Really,  they  are  only  part  of  one  whole;  practical  socialism 
being  a  kind  of  preliminary  step  toward  ideal  socialism,  so 
that  we  might  with  more  reason  call  them  elementary  and  ad- 
vanced socialism. 

"I  am  an  ideal  socialist,  and  desire  to  have  the  whole  social- 
istic programme  carried  out. 

"Practical  socialism  is  so  simple  that  a  child  may  understand 
it.  It  is  a  kind  of  national  scheme  of  co-operation,  managed  by 
the  state.  Its  programme  consists,  essentially,  of  one  demand — 
that  the  land  and  other  instruments  of  production  shall  be  the 
common  property  of  the  people,  and  shall  be  used  and  managed 
by  the  people  for  the  people. 

"Make  the  land  and  all  the  instruments  of  production  state 
property;  put  all  farms,  mines,  mills,  ships,  railways  and  shops 
under  state  control,  as  you  have  already  put  the  postal  and 


GOVERN^IENTAL  SOCIALISM  93 

telegraphic  service  under  state  control,  and  practical  socialism 
is  accomplished. 

"The  postal  and  telegraphic  service  is  the  standing  proof  of 
the  capacity  of  the  state  to  manage  the  public  business  with 
economy  and  success. 

' '  That  which  has  been  done  with  the  post  offices  may  be  done 
with  mines,  trams,  railways  and  factories. 

"The  difference  between  socialism  and  the  state  of  things 
now  in  existence  will  now  be  plain  to  you. 

"At  present  the  land — that  is,  England— does  not  belong  to 
the  people — to  the  English — but  to  a  few  rich  men.  The  mines, 
mills,  ships,  shops,  canals,  railways,  houses,  docks,  harbors  and 
machinery  do  not  belong  to  the  people,  but  to  a  few  rich  men. 
"Therefore  the  land,  the  factories  the  railways,  ships,  and 
machinery  are  not  now  used  for  the  general  good  of  the  people, 
but  are  used  to  make  wealth  for  the  few  rich  men  who  own 
them. 

"Socialists  say  that  this  arrangement  is  unjust  and  unwise, 
that  it  entails  waste  as  well  as  misery,  and  that  it  would  be 
better  for  all,  even  for  the  rich,  that  the  land  and  other  instru- 
ments of  production  should  become  the  property  of  the  state, 
just  as  the  post  office  and  the  telegraphs  have  become  the  prop- 
erty of  the  state. 

"Socialists  demand  that  the  state  shall  manage  the  railways 
and  the  mines  and  the  mills,  just  as  it  now  manages  the  post 
offices  and  the  telegraphs. 

"Socialists  declare  that  if  it  is  wicked  and  foolish  and  im- 
possible for  the  state  to  manage  the  factories,  mines,  and  rail- 
ways, then  it  is  wicked  and  foolish  and  impossible  for  the  state 
to  manage  the  telegraphs. 

"Socialists  declare  that  as  the  state  carries  the  people's  let- 
ters and  telegrams  more  cheaply  and  more  efficiently  than  they 
were  carried  by  private  enterprise,  so  it  could  grow  com  and 
weave  cloth  and  work  the  railway  systems  more  cheaply  and 
more  efficiently  than  they  are  now  worked  by  private  enter- 
prise. 

"Socialists  declare  that  as  our  government  now  makes  food 
and  clothing  and  arms  and  accouterments  for  the  army  and 
navy  and  police,  so  it  could  make  them  for  the  people. 

"Socialists  declare  that  as  many  corporations  make  gas,  pro- 
vide and  manage  the  water-supply,  look  after  the  paving  and 
lighting  and  cleansing  of  the  streets,  and  often  do  a  good  deal 


94  THE  PRICE  OF  INEFFICIENCY 

of  building  and  farming,  so  there  is  no  reason  why  they  should 
not  get  coal  and  spin  yarn  and  make  boots  and  bread  for  the 
people. 

**  Socialists  point  out  that  if  all  the  industries  of  the  nation 
were  under  state  control,  all  the  profit,  which  now  goes  into  the 
hands  of  a  few  idle  men,  would  go  into  the  coffers  of  the  state — 
which  means  that  the  people  would  enjoy  the  benefits  of  all  the 
wealth  they  create. 

''This,  then,  is  the  basis  of  socialism — that  England  should 
be  owned  by  the  English  and  managed  for  the  benefit  of  the 
English,  instead  of  being  owned  by  a  few  rich  idlers  and  mis- 
managed by  them  for  the  benefit  of  themselves. 

''But  socialism  means  more  than  the  mere  transference  of 
the  wealth  of  the  nation  to  the  nation. 

"Socialism  would  not  endure  competition.  "Where  it  found 
two  factories  engaged  in  under-cutting  each  other  at  the  price 
of  long  hours  and  low  wages  to  the  workers,  it  would  step  in 
and  fuse  the  two  concerns  into  one,  save  an  immense  sum  in 
cost  of  working,  and  finally  produce  more  goods  and  better 
goods  at  a  lower  figure  than  were  produced  before. 

"But  practical  socialism  would  do  more  than  that.  It  would 
educate  the  people.  It  would  provide  them  cheap  and  pure 
food.  It  would  extend  and  elevate  the  means  of  study  and 
amusement.  It  would  foster  literature  and  science  and  art.  It 
would  encourage  and  reward  genius  and  industry.  It  would 
abolish  sweating  and  jerry  work.  It  would  demolish  the  slums 
and  erect  good  and  handsome  dwellings.  It  would  compel  all 
men  to  do  some  kind  of  useful  work.  It  would  recreate  and 
nourish  the  craftsman's  pride  in  his  craft.  It  would  protect 
women  and  children.  It  would  raise  the  standard  of  health  and 
morality ;  and  it  would  take  the  sting  out  of  pauperism  by  pay- 
ing pensions  to  honest  workers  no  longer  able  to  work. 

"^V^ly  nationalize  the  land  and  instruments  of  production? 
To  save  waste,  to  save  panics;  to  avert  trade  depressions, 
famines,  strikes  and  congestion  of  industrial  centers;  and  to 
prevent  greedy  and  unscrupulous  sharpers  from  enriching 
themselves  at  the  cost  of  the  national  wealth,  health  and  pros- 
perity. In  short,  to  replace  anarchy  and  war  by  law  and  order. 
To  keep  the  wolves  out  of  the  fold,  to  tend  and  fertilize  the 
field  of  labor  instead  of  allowing  the  wheat  to  be  strangled  by 
the  tares,  and  to  regulate  wisely  the  distribution  of  seed  corn 
of  industry  so  that  it  might  no  longer  be  scattered  broadcast — 


GOVERN^IENTAL  SOCIALISM  95 

some  falling  on  rocks  and  some  being  eaten  up  by  birds  of  the 
air. 

"I  will  now  give  you  one  example  of  the  difference  between 
socialism  and  the  existing  system. 

"Under  existing  conditions  consider  the  state  of  the  salt 
trade.  The  mines  and  manufacture  owned  and  carried  on  by 
a  number  of  firms,  each  of  which  competes  against  all  the  rest. 

"Result:  Most  of  the  small  firms  ruined;  most  of  the  large 
firms  on  the  verge  of  ruin.  Salt  boilers,  the  workmen,  working 
twelve  hours  a  day  for  three  shillings  and  the  public  wasting 
more  salt  than  they  use. 

"Put  this  trade  under  state  control.  They  will  cease  to  make 
salt  to  waste.  They  will  establish  a  six  hour  day,  and  they  will 
raise  the  wages  of  the  men,  to  say  two  pounds  a  week. 

"To  pay  these  extra  wages,  they  ^dll  abolish  all  the  unneces- 
sary middlemen  and  go-betweens.  The  whole  industry  will  be 
placed  under  one  management.  A  vast  number  of  clerks, 
agents,  travelers,  canvassers  and  advertisers  will  be  dispensed 
with,  the  salaries  of  the  managers  will  be  almost  entirely  saved, 
and  the  cost  of  distribution  will  be  cut  down  fully  seventy-five 
per  cent. 

"The  same  system  would  be  pursued  with  other  industries." 

It  is  interesting  to  note  that  the  process  described  by  Mr. 
Blatchford  as  the  ideal  of  socialism  is  exactly  that  pursued  by 
American  monopolies.  It  must  therefore  be  a  good  system. 
In  America,  however,  it  is  for  the  benefit  of  the  trusts  and  not 
the  public,  which  makes  a  difference. 


CHAPTER  IX 
GOVERNMENTAL  SOCIALISM  IN  GERMANY 

What  individualism  has  accomplished — Where  it  has  failed — ^The  long  arm 
of  the  German  state — How  it  guides  the  destinies  of  the  citizen — Bis- 
marck's great  policy — 'The  duty  of  the  state  to  the  citizen — The  re- 
spect in  which  the  German  government  is  held  by  the  public — The 
systematic  organization  of  groups  in  all  walks  of  life — The  group  or 
combination  as  a  lever  for  individual  rights — The  post  office  as  a  bank 
of  deposit — How  money  famines  and  panics  are  side  tracked  in  Ger- 
many— Profits  of  nationalized  railroads — The  business  of  recurring 
functions — The  German  government  as  the  biggest  business  man  in 
Europe — How  German  states  pay  dividends  to  their  citizens  instead 
of  collecting  taxes — Right  of  the  government  to  seize  mines,  lands, 
etc. — Theory  of  unequal  taxation  as  a  result  of  government  in  busi- 
ness— Holding  down  a  job  in  Germany  for  life — Why  "pull"  does  not 
pull — Politicians  almost  a  curiosity — Respect  shown  for  men  of  at- 
tainments— German  trusts — How  they  benefit  the  country — How  un- 
fair competition  is  squelched — Real  significance  of  trusts — The  social- 
ists only  waiting  for  the  capitalistic  game  to  grow  fat — Why  the 
American  president  has  more  power  than  the  German  Kaiser — The 
German  government  really  governs — The  American  government  oc- 
casionally wakes  up  but  seldom  catches  up — Cost  of  trust  busting. 

Compared  with  what  has  been  done  in  the  United  States  in 
governmental  socialism,  the  extent  to  which  it  has  developed  in 
Germany  is  remarkable.  This  is  due  to  the  fact  that  the  Ger- 
man takes  an  altogether  different  view  of  the  relations  of  the 
state  and  the  individual,  to  that  held  in  England  and  the 
United  States  particularly  and  to  a  lesser  extent  by  France  and 
other  countries. 

Democracy  and  individualism  are  the  key  notes  struck  by 
the  United  States.  Every  opportunity  and  incentive  is  given 
for  the  development  of  the  individual,  even  the  family  being  a 
much  weaker  organization  than  that  of  France,  for  example, 
where  the  member  of  the  family,  as  such,  is  subject  to  restric- 
tion of  his  individual  privileges  in  favor  of  the  family  unit. 

This  insistence  on  the  rights  and  privileges  of  the  individual 

has  made  the  United  States  avoid  governmental  socialism  as  far 

as  possible. 

96 


GOVERNMENTAL  SOCIALISM  IN  GERMANY       97 

In  Germany,  however,  an  entirely  different  view  is  taken. 
The  state  is  regarded  paternally,  to  an  extent  uniraagined  in 
America.  The  state  is  assumed  to  have  certain  duties  toward 
the_  individual  and  the  individual  toward  the  state.  The  in- 
dividual as  an  individual  has  a  less  important  place  in  the  or- 
ganism. The  welfare  of  the  whole  is  the  first  thought,  an  atti- 
tude which  is  the  outgrowth  of  Roman  law  and  autocratic 
monarchical  practices,  while  'the  individualistic  ideas  of  the 
United  States  and  England  are  derived  from  centuries  of  strug- 
gles for  free  political  institutions,  a  rich  heritage  of  liberty 
from  which  Germany,  too,  has  derived  no  small  benefit. 

The  German  states  early  looked  upon  the  protection  of  the 
weak  from  economic  misery  as  one  of  the  duties  of  the  govern- 
ment. 

The  so-called  Prussian  common  law,  as  modified  by  Frederick 
William  II,  promulgated  July  1,  1794,  condemned  idleness, 
recognized  the  right  of  every  subject  to  work,  and  defined  the 
state  to  be  the  protector  of  the  poor.  The  common  law  pro- 
claimed : 

I.  It  is  the  duty  of  the  state  to  provide  for  the  sustenance  and 
support  of  those  of  its  subjects  who  cannot  obtain  subsistence 
for  themselves. 

II.  Work  adapted  to  their  strength  and  capacities  shall  be 
supplied  to  those  who  lack  means  and  opportunity  of  earning 
a  living  for  themselves,  and  those  dependent  upon  them. 

III.  Those  who,  from  laziness,  love  of  idleness  or  other  irregu- 
lar proclivities,  do  not  choose  to  employ  the  means  offered  them 
of  earning  a  living  shall  be  kept  at  useful  work  by  compulsion 
and  punishment,  under  proper  control. 

VI.  The  state  is  bound  to  take  such  measures  as  mil  prevent 
the  destitution  of  its  subjects,  and  check  excessive  extravagance. 

XV.  The  police  authority  of  every  place  must  provide  for 
all  poor  and  destitute  persons,  whose  subsistence  cannot  be  in- 
sured in  any  other  way. 

The  Stern-Hardenburg  legislation  of  the  early  part  of  the 
nineteenth  century  supplemented  this  fundamental  law,  and 
was  the  basis  of  the  doctrine  of  the  right  to  work,  one  of  the 
strong  features  of  Bismarck's  policy. 

It  has  continued  a  characteristic  German  practice,  and  is  car- 
ried out  in  various  forms  of  insurance  and  pensions  and  other 
benefits  to  the  less  fortunate  members  of  society. 

In  addition  to  the  usual  functions  of  internal  government 


98  THE  PRICE  OF  INEFFICIENCY 

common  to  most  governments,  as  outlined  in  the  previous 
chapter,  the  German  government  undertakes  other  functions. 
Prominent  among  them  is  the  elimination  of  obstacles  or  re- 
straints hampering  individual,  associated  or  other  activity,  and 
measures  fostering  commerce  and  trade,  M^hen  the  efforts  of  the 
individuals  or  associations  cannot  gain  the  desired  effect;  the 
operation  of  business  enterprises  when  conducted  unsatisfac- 
torily by  private  owners,  and  legislation  for  the  protection  of 
the  poor  against  the  ills  of  sickness,  accident,  old  age  and  ex- 
tortion of  the  rich ;  and  acts  in  regulation  of  competition  and  the 
regulations  of  powerful  units  or  associations  to  the  public  as  a 
whole. 

In  Germany, ' '  Staatsnotreeht, ' '  or  the  right  of  the  state  in  cases 
of  necessity,  is  much  more  comprehensive  than  the  correspond- 
ing "right  of  eminent  domain"  in  Anglo-Saxon  countries.  It 
is  applied  not  only  to  land  but  to  business  and  other  forms  of 
private  property.  In  considering  the  exercise  of  the  powers  of 
the  state,  the  difference  in  the  points  of  view  of  the  German  and 
the  American  are  noticeable  almost  at  the  tone  of  the  first 
syllable  of  the  discussion.  The  German  in  speaking  of  the  ac- 
tivities and  powers  of  the  government  accords  it  a  certain  inde- 
finable authority,  while  the  American  in  speaking  of  the  acts 
of  the  government,  is  without  the  same  confidence  and  respect, 
there  being  no  sense  of  conviction  or  finality.  It  is  as  though 
the  act  of  the  government  were  the  act  of  a  partisan  and  not  a 
government,  and  by  no  means  to  pass  unquestioned. 

AVilliam  C.  Dreher  in  "The  German  Drift  towards  Socialism" 
in  The  Atlantic  Monthly,  July,  1911,  states: 

"It  is  astonishing  to  what  an  extent  the  Germans  have  gone 
in  organizing  life  in  all  its  activities.  The  individual  is  every- 
where learning  that  his  independent  strivings  are  ineffective 
both  for  himself  and  for  society;  that  as  a  unit  he  counts  for 
little.  The  working  people  long  ago  learned  that  they  could 
better  their  position  only  through  organization;  and  as  united 
labor  became  more  self-assertive  in  presenting  its  demands,  the 
great  employers  of  labor,  the  manufacturers  of  the  country,  or- 
ganized themselves  for  the  purpose  of  protecting  themselves 
from  those  demands.  Now  both  employer  and  employee  have 
surrendered  their  individual  position,  committing  their  rights 
to  the  organization,  which  acts  in  its  collective  capacity  in  the 
interests  of  its  members;  it  fixes  the  wage-tariff  and  the  length 
of  the  day's  work,  it  settles  strikes  and  lock  outs  by  treaty 


GOVERNMENTAL  SOCIALISM  IN  GERMANY        99 

with  the  opposing  organization,  and  in  a  hundred  ways  it  ab- 
sorbs and  discharges  the  functions  of  the  individual  in  his  own 
behalf.  Combinations  and  syndicates  of  manufacturers  facili- 
tate the  marketing  of  goods,  make  or  dictate  prices,  assign 
allotments  to  each  factory  of  the  amount  of  goods  that  it  may 
produce,  in  many  eases  handle  all  orders  for  goods  and  treat 
the  individual  manufacturer  merely  as  their  agent. 

' '  The  state,  of  course,  takes  hold  of  the  individual 's  life  much 
more  broadly,  and  \\dth  more  systematic  purpose.  The  individ- 
ual's health  is  cared  for,  his  house  is  inspected,  his  children  edu- 
cated, he  is  insured  against  the  worst  ^dcissitudes  of  life,  his  sav- 
ings are  invested,  his  transportation  of  goods  or  persons  is  under- 
taJ^en,  his  need  to  communicate  with  others  by  telegraph  or 
telephone  is  met — all  by  the  paternal  state  or  city. 

"A  few  years  ago  the  post  office  established  a  banking  depart- 
ment, designed  more  to  facilitate  payments  than  to  take  care  of 
savings.  It  is  a  system  of  open  accounts,  on  which  moneys  are 
paid  in  and  out  upon  order  slips — an  admirable  method  for 
making  collections.  The  system  has  already  become  very  popu- 
lar; in  1910,  only  the  second  year  in  existence,  the  department 
effected  payments  amounting  to  about  $4,440,000,000.  It  is 
operated  in  connection  with  the  Reichsbank,  with  which  its  bal- 
ances are  deposited.  The  Reichsbank  itself,  the  great  cen- 
tral note-issuing  institution  of  the  Empire,  is  a  splendid  exam- 
ple of  what  is  done  in  Germany  through  efficient  government 
administration. 

''While  its  control  is  owned  by  private  persons,  its  adminis- 
tration is  wholly  in  the  hands  of  the  Imperial  Government,  and 
a  large  part  of  its  profits,  often  more  than  half,  falls  to  the 
treasury  by  law.  With  above  500  branches  in  all  sections  of 
the  land,  with  an  annual  turnover  of  about  $85,000,000,000, 
with  a  note  circulation  approximating  $500,000,000  this  great 
institution  performs  an  incalculable  service  to  the  people. 

"Its  elastic  note  circulation,  sometimes  expanded  by  more 
than  $125,000,000  in  a  single  week,  wholly  prevents  those  money 
famines  that  have  often  proved  disastrous  to  American  business 
interests. 

"Another  semi-public  interest  is  the  Prussian  Central  Co-op- 
erative Bank  whose  function  is  to  extend  cheap  banking  facil- 
ities to  the  numerous  co-operative  societies  that  have  sprung  up 
in  Prussia ;  its  capital  of  $9,000,000  is  supplied  by  the  state,  and 
its  administration  is  under  the  supervision  of  the  Finance  Min- 


100  THE  PRICE  OF  INEFFICIENCY 

ister.  The  Seehandlung,  which  is  the  Prussian  state  bank,  is 
the  largest  lender  of  money  in  the  Berlin  market.  Nearly  all 
the  savings  bank  business  is  done  by  public  institutions — only 
about  eight  per  cent  of  the  total  deposits  in  savings  banks  be- 
ing vrith  private  institutions. 

*'At  the  end  of  1907  there  were  above  2,700  municipal  and 
provincial  savings  banks,  with  6,600  branches,  and  their  deposits 
amounted  to  more  than  $3,000,000,000.  At  that  time  above 
twenty-eight  persons  in  every  one  hundred  Germans  held  an 
account  in  a  savings  bank.  Such  is  the  extent  to  which  semi- 
socialistic  banking  has  taken  hold  of  the  German  people. 

"The  railway,  as  is  well  known,  is  almost  wholly  a  state  in- 
stitution in  Germany.  The  Prussian  system,  with  its  more  than 
400,000  laborers  and  officials,  is  the  largest  employer  of  labor 
in  the  world;  and  this  vast  business  is  administered  with  re- 
markable honesty  and  efficiency.  Cases  of  embezzlement  or 
other  crime  are  extremely  rare ;  relatively  few  persons  are  killed 
or  maimed  through  accident;  and  the  railways  are  kept  quite 
aloof  from  politics. 

"Freight  rates,  indeed,  are  considerably  higher  than  the 
average  American  rates,  but  the  bulk  of  the  passenger  traffic  is 
carried  at  lower  prices  than  in  America.  Bismarck's  purpose 
to  use  the  railway  wholly  in  the  interests  of  the  people,  as  de- 
clared when  he  nationalized  the  roads,  has  not  been  fully  carried 
out,  since  rates  have  been  kept  at  a  high  enough  figure  to  make 
them  the  largest  source  of  revenue  for  the  state,  besides  paying 
interest  on  the  capital  invested.  On  the  other  hand,  shippers 
have  the  advantage  of  absolutely  fair  treatment ;  there  is  no  dis- 
crimination among  them,  there  are  no  rebates,  secret  or  other. 
Another  great  advantage  consists  in  having  a  single  system  to 
deal  with,  as  well  as  simplified  tariff  schedules.  Before  the 
nationalization,  there  were  63  railways  with  1,357  different 
tariffs." 

There  are  certain  forms  of  industiy  which  seem  peculiarly 
fitted  for  governmental  control,  among  them  being  the  railroad 
and  post  office.  The  reason  for  this  may  lie  in  the  fact  that  they 
are  vast  machines  which  when  once  set  in  motion  require  little 
or  no  initiative  on  the  part  of  the  employees.  They  are  forms 
of  activity  in  which  no  concrete  result  is  left;  being  rather  a 
series  of  operations,  carried  out  over  and  over  again.  Thus 
when  a  letter  is  delivered,  no  product  is  left,  nothing  has  been 
created,  the  location  of  the  letter  has  only  been  changed.     A 


GOVERNMENTAL  SOCIALISM  IN  GERMANY      101 

million  letters  through  the  same  process  require  no  further 
technical  adaptation  on  the  part  of  the  employees.  A  vast  or- 
ganization, thus,  which  exists  but  to  perform  functions,  when 
once  erected  continues  of  its  own  momentum,  and  is  an  entirely 
different  problem  from  the  conducting  of  a  business,  where  new 
ideas  must  be  constantly  introduced,  and  the  active  competition 
of  others  met  and  overcome.  If  the  letter  carrier  was  constantly 
pursued  by  others,  endeavoring  to  get  the  letters  away  and  de- 
liver them  by  another  route,  or  if  he  met  constant  opposition 
to  his  progress,  the  delivery  of  the  mail  would  be  an  entirely 
different  operation,  and  more  like  business  competition. 

Yet  the  German  governmental  socialism  has  been  carried  to 
such  a  point,  that  the  state  can  and  does  successfully  conduct 
business  of  a  competitive  nature,  involving  great  initiative  and 
the  constant  adoption  of  new  ideas.  This  is  rendered  possible 
in  Germany  by  the  fact  that  there  the  officials  are  willing  to 
devote  to  the  affairs  of  the  state  the  same  energy  that  they 
would  devote  to  their  private  concerns. 

The  extent  to  which  Germany  as  a  state  has  gone  into  busi- 
ness may  be  grasped  by  considering  the  amount  and  the  vari- 
ous sources  of  the  profits  of  the  businesses  engaged  in. 

Elmer  Roberts  in  "Monarchical  Socialism  in  Germany"  in 
Scrihner's  Magazine,  January,  1910,  states: 

''The  Imperial  government  and  the  governments  of  the  Ger- 
man states  took  profits  in  1908,  from  the  various  businesses 
conducted  by  them,  of  $277,385,095.  Estimating  the  capital 
value  at  a  4%  ratio,  the  value  of  the  productive  state 
owned  properties  is  $6,933,627,375.  Roundly,  the  governments 
operate  dividend  yielding  works,  lands,  and  means  of  communi- 
cation worth  $7,000,000,000,  and  the  governments  continue  to 
follow  a  policy  of  fresh  acquisitions.  Taking  the  federated 
states  together,  38%  of  all  the  financial  requirements  for 
governmental  purposes  were  met  last  year  out  of  profits  of 
government-owned  enterprises.  Including  the  Imperial  govern- 
ment, a  new  comer  with  relatively  few  possessions,  one-quarter 
of  all  the  expenses  of  the  state  and  the  imperial  governments, 
on  army,  navy  and  all  other  purposes,  were  paid  out  of  the  net 
profits  on  governmental  businesses.  Among  the  undertakings 
are  no  tobacco,  spirit  or  match  monopolies. 

"The  miniature  ducal  monarchy  of  Schaumburg-Lippe,  with 
a  population  of  44,992,  and  an  area  of  131  square  miles,  made 
$206,150    from    property    owned    collectively,    or    5%    of    the 


102  TPIE  PRICE  OF  INEFFICIENCY 

requirements  of  the  state.  The  still  smaller  principality  of 
Reuss,  the  elder,  with  122  square  miles,  and  a  population  of 
70,603,  makes  a  profit  of  $10,000,  the  smallest  actually,  and  the 
smallest  in  proportion  of  any  of  the  German  states.  The  little 
neighbor  of  Reuss,  Schwarzburg-Sonderhausen,  draws  33%  of  the 
budget  from  farms  and  forests;  Oldenburg,  22%;  Mecklenburg- 
Strelitz,  49.14%.  But  it  is  the  great  states  of  the  empire  where 
state  management  of  large  properties  shows  the  more  important 
results.  Bavaria  pays  39%  of  all  of  the  administrative  costs 
from  public-owned  properties;  Saxony,  31%;  Wurtemberg, 
38.7%;  and  Prussia,  47.36%. 

"  Prussia,  which  forms  about  five-eighths  of  the  empire,  has 
a  constantly  increasing  revenue  from  state-owned  enterprises, 
which  yielded  in  1908  net  returns  of  about  $176,000,000,  or 
more  than  twice  the  state's  income  from  taxes,  which  was  $85,- 
452,000 ;  the  average  income  from  its  enterprises  per  capita  was 
18.1  marks,  while  the  average  per  capita  taken  in  taxation  was 
8.7  marks.  In  that  year  the  state,  owing  to  extensions  in  canals, 
railways  and  other  public  works,  raised  by  loans  what  amounted 
to  an  average  of  7.1  marks  per  capita. 

"The  state  income  from  public  properties  amounted  in  1908 
to  somewhat  more  than  the  total  income  from  taxation  and  from 
borrowings.  The  railways  were  the  largest  source  of  income, 
and  netted  $149,755,000  or  about  8%  on  the  total  invested 
by  Prussia  in  its  railway  system  since  the  state  began  to  buy 
and  build  railways  in  1848-49. 

"Prussia  derived  from  other  sources,  from  its  crown  forests, 
the  leased  farms,  the  iron,  coal,  potash,  salt  and  other  mines,  the 
porcelain  factories,  banking  and  a  variety  of  less  important  in- 
dustries, $26,900,000.  The  policy  of  Prussia,  which  dominates 
the  empire,  is  strongly  in  the  direction  of  increasing  the  partici- 
pation of  the  government  in  industrial  enterprises.  The  Prus- 
sian legislature,  acting  upon  a  recommendation  of  the  emperor, 
in  the  speech  from  the  throne,  at  the  opening  of  the  Diet  in 
1906,  passed  a  bill  extending  widely  an  old  act,  giving  the  state 
the  right  to  take  over  at  a  valuation  any  discovery  of  mineral 
riches  on  private  lands. 

"The  theory  of  the  Prussian  cabinet  and  the  crown  is  that  it 
is  for  the  interests  of  the  people  that  the  state  should  take  part 
in  industrial  combinations  that  undertake  to  regulate  the  prices 
of  articles,  or  the  products  in  any  industry.  Public  opinion 
supports  this  principle. 


GOVERNMENTAL  SOCIALISM  IN  GERMANY      103 

"A  summary  of  the  government  owned  properties  and  the 
income  derived  from  them  is  subjoined : 

Values  Net  Incomes 

Farms    $    198,122,725  $     7,925,309 

Forests    730,898,200  29,235,928 

Mines   128,907,725  5,116,309 

Railways 4,706,904,750  189,916,190 

Telephones 

Telegraphs  1 

Express  packages            [■            094,816,650  27,792,666 

Mails  ) 

Other   works    435,184,900  17,407,476 


"Upon  no  department  of  industry  do  any  of  the  state  gov- 
ernments lose  except  on  steamers.  The  grand  duchy  of  Baden 
runs  its  internal  navigation  lines  at  a  loss  of  $15,833.  Saxony, 
Wurtemberg  and  Mecklenburg-Schwerin  gain  on  their  lines 
$7,163,  so  that  on  the  whole  of  the  state-owned  steamer  lines 
there  is  a  loss  of  $8,670." 

The  question  as  to  whether  the  government  should  or  should 
not  make  any  profit  out  of  its  enterprises  is  one  which  has  been 
very  practically  decided  in  favor  of  profit.  Theoretically  the 
profit  of  a  government  enterprise  is  a  form  of  indirect  taxation. 
In  the  United  States  the  taxation  which  business  profits  amount 
to,  is  laid  on  the  public  as  an  encouragement  for  individual  in- 
itiative on  the  part  of  the  business  man  and  goes  to  the  business 
man.  The  profits  of  a  governmental  business  are  a  tax  on  that 
portion  of  the  public  which  patronizes  that  part  of  the  govern- 
ment's business.  It  is  a  discrimination  against  the  customer  in 
favor  of  those  who  do  not  purchase.  On  the  other  hand,  if  the 
enterprises  were  run  without  a  profit  or  loss,  the  facilities  of 
the  state  would  be  in  a  sense  unduly  extended  to  customers  of 
the  business,  since  they  would  be  securing  service  at  less  than 
the  commercial  rate,  and  such  a  plan  would  be  a  discrimination 
in  favor  of  the  customer. 

It  is  a  question,  however,  whether  this  would  not  be  the  better 
plan,  allowing  the  government  to  raise  all  the  money  needed  by 
direct  taxation. 

Low  prices  to  all  would  stimulate  business  greatly  and  allow 
the  public  to  make  profits  in  its  individual  business  and  have 
the  use  of  all  its  capital  to  a  later  moment,  thus  being  better 
able  to  pay  the  taxes  when  the    time  for  their  withdrawal  came. 

If  instead  of  having  to  pay  freight  rates  which  show  the  gov- 


104  THE  PRICE  OF  INEFFICIENCY 

ernment  a  profit,  the  business  men  had  the  advantage  during 
the  year  of  cost  freight  rates,  the  capital  which  he  would  thus 
retain  in  his  own  business  could  be  turned  over  two  or  three 
times  at  a  considerable  profit,  enabling  him  at  the  end  of  the 
year  to  pay  the  direct  tax  out  of  the  profits  of  the  turn  overs. 
Thus  the  burden  of  taxation  would  be  entirely  lifted,  merely  by 
an  administrative  device,  for  it  is  highly  important  to  the  busi- 
ness man  and  to  industry  as  a  whole  to  have  the  benefit  of  as 
much  capital  and  credit  as  they  can  employ  to  advantage. 

The  ease  with  which  the  government  gets  funds,  through 
profits  on  its  businesses,  however,  while  an  immediate  drain  on 
capital  and  an  encouragement  to  official  extravagance,  is  for 
practical  purposes  such  an  administrative  convenience,  that  as 
a  system  it  is  likely  to  continue. 

There  is  not,  either,  in  Germany,  the  official  extravagance 
shown  by  the  servants  of  the  public,  as  in  the  United  States,  for 
owing  partially  to  the  bureaucratic  system  and  partly  to  an 
identification  of  the  interests  of  the  employee  and  employer, 
whether  the  employer  be  the  government  or  an  individual,  bet- 
ter service  is  secured  and  temptation  to  extravagance  is  not 
given  way  to. 

When  a  man  gets  a  job  in  Germany,  whether  with  the  govern- 
ment or  with  a  corporation  or  individual  employer,  he  expects 
to  hold  it  down  for  twenty-five  years  at  least  if  not  for  his  life 
time.  He  does  not,  as  in  the  United  States,  expect  to  stay  in 
the  business  just  long  enough  to  get  a  suit  of  clothes  and  start 
some  other  business  on  his  own  account.  Expecting  to  stay 
with  his  employer,  it  is  to  his  interest  to  contribute  all  he  can 
to  his  employer's  success.  In  the  case  of  a  governmental  service, 
the  employee  enters  it  with  the  idea  of  making  it  his  life  career, 
and  not,  as  in  America,  of  making  it  a  temporary  but  lucrative 
perquisite. 

As  every  individual  has  his  own  ambition,  and  must  express 
what  his  life  means  to  him  in  some  way,  if  as  in  Germany  the 
ambition  of  the  employee  is  in  his  employer's  interest,  or  the 
state's  interest,  the  service  he  gives  will  be  the  best  that  is  in 
him. 

This  relationship  between  the  employer  and  employee  is  one 
of  the  cornerstones  of  German  progress.  It  gives  a  solidarity 
to  an  enterprise  or  a  service  that  is  wanting  when  the  em- 
ployees and  employer  are  constantly  warring  and  the  employer 


GOVERNIMENTAL  SOCIALISM  IN  GER]\rANY      105 

watching  the  clock  in  the  morning  as  closely  as  the  employee 
watches  it  in  the  evening. 

On  their  part,  the  government  and  the  private  employer,  in 
taking  on  an  employee,  expect  him  to  remain  permanently. 
They  realize  that  their  interests  are  identical.  In  Germany  the 
employee  works  for  the  employer  and  the  employer  works  for 
the  employee,  the  government  for  the  public  (its  employer)  and 
the  public  for  the  government,  a  system  entirely  different  from 
the  American  plan  of  everybody  for  his  own  pocket  and  the 
devil  take  the  hindmost. 

In  Germany,  too,  the  greatest  respect  is  shown  for  those  in 
authority,  a  deference  that  seems  to  an  American  to  reach  the 
point  of  absurdity ;  but  let  the  German  official  show  the  slightest 
dereliction  of  duty  and  the  average  citizen  will  report  the  mat- 
ter promptly  to  the  Polezei,  Biirgermeister,  Landrat  or  Gover- 
nor as  the  case  may  require,  successively  if  necessary,  and  some- 
thing is  done  about  it,  a  very  different  process  from  the  Ameri- 
can's bluff  of  taking  a  street  car  conductor's  number  as  well  as 
his  back  talk  and  going  no  further. 

One  of  the  adornments  of  the  American  street  car  which 
frightens  the  incoming  German  and  arouses  his  indignation  is 
the  sign,  "$500  fine  or  one  year  in  prison  for  spitting  on  the 
floor."  In  Germany  the  penalty  is  three  marks  (75  cents)  and 
the  loss  of  half  a  day's  time  in  paying  it,  but  everj^body  who 
spits  gets  caught  and  is  fined.  When  the  German  here,  how- 
ever, sees  that  the  spitter  spits  at  his  own  sweet  will  and  nobody 
is  ever  imprisoned  for  it  or  fined,  he  gets  a  new  insight  into 
what  may  be  called  American  humor,  and  finds  that  seemingly, 
the  principal  result  of  the  sign  is  to  provoke  spitting.  It  is, 
in  reality,  however,  but  one  of  a  vast  number  of  American  laws 
which  are  dead  letters  because  the  punishment  does  not  fit  the 
crime,  that  it  is  so  vastly  in  excess  of  the  requirements  as  to 
cover  and  serve  rather  as  a  hot  house  for  the  crime. 

Another  factor  of  great  importance  in  the  success  of  Ger- 
many's undertakings  is  the  freedom  from  political  influence 
observed  in  appointments.  A  striking  example  of  this  freedom 
is  seen  in  the  method  of  selecting  governmental  and  city  em- 
ployees, all  of  whom  must  have  a  requisite  degree  of  training. 
Cities  advertise  even  for  the  most  important  of  their  officials, 
such  as  mayor,  chamberlain,  fire  and  police  commissioners,  etc. 
The  larger  cities  have  several  burgomasters  trained  in  different 


106  THE  PRICE  OF  INEFFICIENCY 

fields   who   serve   under   one  head   burgomaster,   practically   a 
commission  form  of  government. 

Ste  ©Idle  beg  Srjlcn  Siirgermeifierl  6er  Stabt  aWogbcBurg 
Ifl  ittfi)l9e  ®rnennutt8  beg  0errn  .JOberfeiirgermeiftetg  Dr.  Settle 
^m  |)tci!f]lf(^ctt  ginan^minifier  nm  su  6efefctt. 

3)Q§  @e|alt  ifi  tjorbe^altlid)  ber  (Bene^mlpng  bc§  ?Be5irf0> 
3lu§f{|uffeg  m^  21000  S?Jf.  feftgcfe^t  mhd  3000W.  fur  freic 
2)iettfln3o^nung  m  5?at^oufe  mit  einbegrtffcn  fmb.  2)iefe  ^tcttj}* 
tuo^nung  Itsirb  abet  tiur  auf  Sibcttuf  Ba^i  clnja^nget  Miibigiing 
geluQ^rt,  mh  mthm,  \mmi  t)on  hUfa  ^thxuu^  gema^t  tuerben 
foate,  3000  2Wf.  aB  SgoljnungScntf^iabisnng  Uergutet. 

9Jeben  bem  ©eljalte  be^ieljt  ber  ©eiuc^Ue  |a^rli(^  4000  2!if. 
Siienjiauftuanbggelber,  mlHit  bet  jpeiifiongberei^tigung  mji^t  unter» 
liegen. 

2)ie  flje^ietten  Sa^MBebingungen  merben  htn  25en)erbern, 
iceld^e  i^re  2ReIbung  big  pm  1.  ©e^jtember  b  igg*  an  ben  Unter* 
3ei(^neten  etnreii^en  ttioden,  auf  drfarbern  abl^rifUii^  mttget^tlt 

2?lagbebtirg,  ben  30.  gnni  1910. 

2)er  Sorriftcnbe  ber  ©tabtberorbneten*23erfammIttng. 

Saenfrfj. 

The  above  is  a  reproduction  of  an  advertisement  of  Magde- 
burg, a  city  of  a  quarter  of  a  million  population,  for  a  mayor, 
which  appeared  with  many  similar  advertisements  in  the  German 
Municipal  Weekly  of  July  23,  1910.  Such  an  advertisement  as 
this  would  give  many  local  politicians  in  an  American  city  a  dis- 
tinct shock.  They  would  think  there  was  an  abundance  of  local 
talent  to  fill  the  position.  German  cities  choose  their  mayors  as 
well  as  other  officials  in  this  way,  obtaining  men  who  have  made  a 
reputation  in  other  cities,  just  as  American  universities  choose 
their  presidents  and  professors.  The  following  is  a  translation 
of  the  advertisement: 

*'The  position  of  First  Mayor  of  the  City  of  Magdeburg,  in 
consequence  of  the  appointment  of  Mr.  Head  Mayor  Dr.  Lentze 
as  Prussian  Finance  Minister,  must  be  refilled. 

"The  salary  is  provisionally  fixed  by  the  council  at  21,000 
marks,  included  in  which  is  an  allowance  of  3000  marks  for  free 
residence  in  the  city  hall.  A  year's  notice  of  change  of  residence 
must  be  given,  and  subsequently  the  city  will  make  an  allowance 
of  3000  marks  for  residence  purpose. 


GOVERNMENTAL  SOCIALISM  IN  GERMANY      107 

"The  official  selected  will  also  receive  an  allowance  of  4000 
marks  for  incidental  expenses,  which  however,  will  not  be  re- 
garded as  part  of  his  salary  when  his  pension  allowance  is  de- 
termined. Copies  of  the  specific  requirements  of  the  election 
which  must  be  complied  with  by  the  candidates,  whose  applica- 
tion must  reach  the  undersigned  on  or  before  the  1st  of  Septem- 
ber of  this  year,  are  obtainable  upon  request." 

Magdeburg,  June  30th,  1910. 
The  Chairman  of  the  City  Council 

Baensch. 

The  highest  regard  is  shown  in  all  German  undertakings  for 
technical  experience  and  expert  technical  knowledge.  In  the 
United  States  an  expert  in  any  line  is  too  apt  to  be  regarded 
either  as  a  book  worm  or  a  crank  of  some  kind;  while  he  may 
be  supposed  to  have  an  ample  fund  of  expert  knowdedge,  he  is 
too  often  assumed  to  be  lacking  in  judgment,  a  quality  more  or 
less  monopolized  by  the  "business  man,"  a  term  which  variously 
embraces  the  banker,  the  promoter,  the  merchant  and  the  ad- 
ministrator of  commercial  and  manufacturing  enterprises. 

The  "business  man"  in  the  United  States  occupies  the  center 
of  the  stage,  which  in  Germany  is  held  by  the  man  of  technical 
knowledge,  the  engineer  and  the  chemist.  From  Emperor  Wil- 
liam down,  the  greatest  interest  is  taken  in  the  work  of  engi- 
neers, architects,  chemists  and  other  trained  experts,  and 
credit  and  other  rewards  are  freely  rendered  them.  The  busi- 
ness man  is  much  less  heard  of  in  Germany,  and  the  "tired 
business  man"  who  rules  the  theater  in  America  in  his  insist- 
ence on  pieces  which  demand  little  thought  and  supply  much 
diversion,  is  entirely  unknown. 

The  efficiency  of  German  governmental  undertakings  as  has 
been  stated  is  greatly  enhanced  by  the  lack  of  politics  in  busi- 
ness, which  is  such  a  bane  in  America.  In  Germany  there  is 
little  or  none  of  the  political  activity,  the  clubs,  organizations 
and  wire  pulling  of  the  United  States,  and  what  little  there  is 
is  usually  done  by  the  clergy,  in  the  interest  of  returning  cer- 
tain members  to  the  Reichstag.  A  ward  heeling  clergyman 
would  be  something  of  a  novelty  in  America,  but  he  would  be 
much  less  harmful  than  a  ward  heeling  bartender. 

The  few  elective  offices  in  Germany,  too,  compared  with 
America,  renders  politics  as  a  business  one  of  small  profit,  and 
one  which  is  not  professionally  followed  as  in  America.     Clergy- 


108  THE  PRICE  OF  INEFFICIENCY 

men  shaking  the  voters  hands  on  election  day  is  not  a  problem  in 
German  life,  while  the  small  politician  is  one  of  the  gravest  of 
America's  problems. 

Foreigners  unacquainted  with  conditions  in  Germany  and 
whose  German  horizon  is  considerably  limited  by  the  large 
looming  of  the  Kaiser  in  the  foreground,  often  talk  of  tyranni- 
cal domination,  and  one  man  power.  These  are  idle  expres- 
sions. The  Kaiser  has  not  the  power  of  an  American  president. 
Property  and  capital  are  more  equitably  distributed  in  Ger- 
many than  in  any  other  country  and  Germany  is  more  of  a 
self  ruled  country  than  any  other  country,  far  more  than  Eng- 
land ruled  by  the  classes  and  America  ruled  by  the  minority. 

The  governmental  socialism  of  Germany,  which  is  proving 
such  a  distinguished  success,  is  from  the  people  by  the  people 
and  for  the  people;  it  is  popular  and  has  been  instituted  and 
continued  by  them  and  is  not  an  enforcement  from  rulers  or  an 
aristocracy. 

The  treatment  of  the  trust  problem  is  vitally  different  in 
Germany.  Trusts  such  as  we  know  them  in  America  do  not 
exist  in  Germany,  but  trade  combinations  known  by  that  name 
or  by  the  name  of  syndicates  or  cartels  are  very  effective  and 
numerous. 

Consul  General  Robert  P.  Skinner  at  Hamburg,  describes  in 
the  United  States  Daily  Consular  and  Trade  Reports,  for  Sept. 
15,  1911,  the  operation  of  these  trusts: 

"There  is  no  German  law  which  either  expressly  authorizes 
or  forbids  the  creation  of  the  so-called  tnists  so  numerous  in  this 
country.  The  law  merely  guarantees  to  the  individual  the 
right  to  engage  in  trade,  but  does  not  withhold  from  him  the 
right  to  combine  with  any  or  all  of  his  competitors.  The  theory 
seems  to  be  that  in  granting  to  trade  and  commerce  the  very 
extensive  privileges  referred  to  by  my  correspondent,  the  gen- 
eral interests  of  the  public  at  large  are  protected  by  the  result- 
ing prosperity  of  such  interests,  even  though  the  immediate 
effect  may  be  to  enhance  the  cost  of  the  commodity  controlled. 

"In  a  recent  discussion  of  the  subject,  Mr.  Albert  Ballin,  the 
general  director  of  the  Hamburg-American  Line  said:  *In 
Germany  syndicates  are  protected  by  several  laws,  and  therefore 
it  may  arise  very  easily  that  the  American  government  would 
require  the  dissolution  of  a  syndicate,  while  the  dissolution,  ac- 
cording to  German  law,  itself  would  become  punishable.'  The 
majority  of  German  business  men  and  economists  are  not  op- 


GOVERNMENTAL  SOCI^VLISM  IN  GERMANY      109 

posed  to  such  syndicates,  and  the  creation  of  monopolies,  in 
which  the  state  itself  sometimes  participates  in  combination  with 
private  producers,  is  lawful  if  the  creators  commit  no  injurious 
act,  a  limitation  so  difficult  to  define  and  comprehend  that  prac- 
tically the  only  difficulties  with  which  the  ordinary  cartels  come 
in  contact  are  the  difficulties  arising  between  the  members  them- 
selves. The  courts  have  frequently  recognized  the  perfect  right 
of  producers  to  control  their  product  in  a  monopolistic  organiza- 
tion as  a  right  somewhat  akin  to  the  right  to  make  use  of  a 
highway,  and  only  subject  to  correction  of  abuses  of  power. 

' '  The  profound  difference  between  the  German  and  the  Amer- 
ican conception  of  sound  business  conditions  is  best  explained, 
perhaps,  by  the  racial  difference  between  the  two  peoples — the 
German  with  strong  collectivist  tendencies  which  manifest  them- 
selves in  society,  in  government  and  in  trade,  and  the  American 
with  a  deeply  rooted  individualism  which  remains  even  when 
he  engages  in  a  collectivist  enterprise.  Thus  it  happens  that 
the  capitalistic  classes  of  Germany,  although  opposing  social- 
ism in  their  public  life,  nevertheless  drift  in  the  direction  indi- 
cated by  their  natural  tendencies  in  their  business  life,  and  in 
so  doing  they  have  the  tacit  approval  of  the  avowed  socialistic 
classes,  who  perceive  in  the  steady  accumulation  of  the  produc- 
ing powers  in  a  few  hands  a  movement  tending  logically  and 
inevitably  toward  the  eventful  realization  of  their  dogma — that 
is,  the  state  in  supreme  control. 

"An  extreme  example  of  the  German  tendency  may  be  found 
in  the  potash  syndicate,  of  which  so  much  has  been  heard.     In 
this  case  the  Prussian  state  itself  was  one  of  the  producers,  and 
when  a  certain  situation  was  reached,  the  state  interposed  and 
required  by  law  that  the  entire  production  of  the  country  should 
be  sold  through  a  single  selling  agency,  organized  by  law,  which 
also  established  the  terms  of  sale  and  the  limitation  of  produc- 
tion.    In  this  case  it  was  argued  that  the  monopolization  of  the 
industry  was  necessary  to  conserve  the  important  mineral  re- 
sources of  the  country.     The  commentators  upon  the  claim  of 
industrial  organizers  that  some  generally  desirable  end  is  to  be 
attained  point  out,  as  has  Gustav  le  Bon— that— '  Socialism  is 
much    less    dangerous    in    reality    in    its    absolute    form    than 
when  it  takes  on  the  aspects  of  simple  projects  of  amelioration 
by  regulating  labor.     Under  its  absolute  form  one  sees  the  dan- 
gers and  may  control  them.     Under  its  altruistic  form,  one  does 
not  see  them  and  it  is  accepted  easily.' 


110  THE  PRICE  OF  INEFFICIENCY 

"The  German  courts  have  repeatedly  ruled,  according  to 
Richard  Calwer,  the  socialistic  writer,  in  his  Cartelle  und 
Trusts,  that  the  syndicates  do  not  violate  the  principles  of  trade 
liberty  as  they  tend  to  protect  the  interests  of  the  whole  nation 
against  the  selfishness  of  individuals,  and  to  protect  the  prod- 
ucts of  industry  from  the  many  disadvantages  of  price  cut- 
ting. 

"Under  these  rulings  absolute  or  partial  monopolization  by 
many  cartels  has  been  brought  about,  the  national  output  being 
reduced,  with  a  consequent  lifting  of  prices  to  a  remunerative 
level.  The  danger  point  would  be  reached,  from  the  point  of 
view  of  the  law,  should  a  cartel  of  this  character,  on  the  possi- 
ble refusal  of  one  outside  producer  to  accept  its  terms,  under- 
take by  unfair  means  to  drive  him  into  its  fold  or  crush  him  if 
he  refused  its  terms,  and  the  difficulty  of  the  prosecution  would 
be  to  prove  that  any  such  results  had  been  contemplated,  even 
though  its  effect  had  been  attained. 

"The  very  form  of  commercial  organization  most  common  in 
Germany  and  America  correspond  to  the  temperamental  qualities 
of  the  two  peoples.  In  Germany  the  commercial  trust  or  cartel 
is  usually  a  federation  in  which  each  member  retains  its  com- 
mercial identity  while  abandoning  its  freedom  of  action  to  the 
federation  for  a  contractual  period  of  three  or  five  or  ten  years 
or  perhaps  longer,  but  expecting  eventually  to  get  it  back,  and 
then  perhaps  make  another  contract  if  the  results  of  the  first 
have  been  satisfactory.  A  German  cartel  is,  as  a  rule,  open  to 
all  those  who  submit  to  its  provisions,  and  the  control  of  the 
members  is  confined  to  the  limits  traced  in  the  federal  pact.  In 
the  typical  American  trust,  instead  of  this  association  of  units 
with  influence  usually  rated  according  to  productive  capacity, 
we  observe  generally  the  permanent  ownership  of  a  large  part 
of  the  enterprise  by  a  small  group  of  persons  in  which  there  is 
ordinarily  some  dominating  personal  element. 

"The  basic  notion  of  the  German  organizer  has  been  to  con- 
trol production  definitely,  leaving  it  to  the  resourcefulness  of 
the  individual  producers  in  the  cartel  to  make  more  or  less 
profit  out  of  the  proportion  of  the  production  allotted  to  them; 
the  basic  notion  of  the  American  organizer  has  been,  usually, 
to  create  a  perfected  and  consolidated  instrument,  success  fol- 
lowing naturally  as  a  result  of  its  well-balanced  and  skillfully 
organized  proportions.  German  cartel  organizations  has  con- 
templated that  all  its  constituent  firms  should  remain  in  busi- 


GOVERNMENTAL  SOCIALISM  IN  GERMANY      111 

ness;  American  commercial  centralization  usually  has  meant 
that  the  weaker  or  for  any  reason  undesirable  elements  should 
go  out  of  business,  suggesting  that  the  strong  native  individual- 
ism of  our  people  rises  to  the  surface  even  when  an  effort  tend- 
ing toward  pure  collectivism  is  attempted. 

''The  highest  degi-ee  of  syndication  in  Germany  has  been 
reached  in  the  mining  and  iron  industries.  Although  the  num- 
ber of  cartels  existing  in  these  industries  is  not  large,  they  are 
mainly  well  organized  and  very  strong;  for  example,  the  Rhen- 
ish-Westphalian  coal  syndicate  in  Essen,  the  Stahlwerks-Ver- 
band,  or  steel  syndicate  in  Dusseldorf. 

"The  Imperial  German  government  issued  statistics  in  1905 
showing  that  there  were  385  cartels  existing  at  that  time  in  Ger- 
many, but  these  figures  are  said  not  to  contain  the  Kondition- 
skartelle  (those,  e.  g.  fixing  terms  of  sale  other  than  prices),  and 
numerous  other  confederations,  the  existence  of  which  was  not 
then  within  the  knowledge  of  the  authorities.  When  these  sta- 
tistics were  made  up,  it  was  understood  that  about  12,000  es- 
tablishments were  members  of  syndicates.  The  following  recap- 
itulation shows  the  variety  of  industries  covered  by  commercial 
combinations  in  1905. 

Coal  mining    19 

Stones  and  earths   27 

Brick  Industry   132 

Earthenware  industry 4 

Glass  industry   10 

Metal   trade    11 

Iron  industry   62 

Machinery,  electricity   2 

Chemical  industries 46 

Textiles    31 

Paper  industry  6 

Leather  trade   6 

Wool  industry    15 

Food  prodvicts 7 

Miscellaneous    7 

Total  385 

Consul  Talbot  J.  Albert  of  Brunswick,  reports  in  reference 
to  the  German  potash  syndicate: 

"The  potash  syndicate  furnishes  an  excellent  example  of 
what  constitutes  a  German  syndicate  and  what  distinguishes  it 
from  an  American  trust.  It  is  only  by  the  study  of  a  concrete 
example  that  the  difference  can  be  clearly  understood. 


112  THE  PRICE  OF  INEFFICIENCY 

"There  are  two  most  significant  and  material  distinctions. 
The  first  is  that  the  potash  syndicate  and  most  of  the  other 
syndicates  have,  as  such,  no  capital  or  shares  of  stock  which 
are  dealt  in  on  the  stock  exchange,  as  is  the  case  with  the  Amer- 
ican trust.  The  second  distinction  is  that  a  syndicate  is  a  com- 
bination for  a  limited  period  of  time,  usually  five  years,  while 
the  life  of  a  trust  is  indefinite. 

''The  units  composing  the  potash  syndicate  and  most  mining 
syndicates  in  Germany  are  companies  of  two  kinds,  namely 
those  whose  capital  is  divided  into  shares  called  'kuxe'  and  those 
whose  shares  are  of  the  ordinary  joint-stock  variety  with  limited 
liability.  The  shares  of  the  joint  stock  companies  are  unassess- 
able, but  on  the  other  hand  '  kuxe  '  are  shares  that  are  assessable 
at  any  time  and  are  of  unlimited  liability.  These  'kuxe'  and 
shares  of  the  individual  concerns  are  dealt  in  on  the  exchanges 
of  the  large  cities  of  Germany. 

"Each  company  that  is  a  member  of  a  German  syndicate  has 
its  representative  on  the  board  of  management  of  the  trust,  and 
this  board  fixes  the  quota  of  production  allowed  each  mine  and 
generally  administers  the  affairs  of  the  entire  combination 
under  the  constitution  and  by-laws  (called  statuten).  The  con- 
stitution and  by-laws  must  be  signed  by  each  concern  entering 
the  syndicate  and  the  provisions  therein  contained  strictly  ob- 
served under  penalties  enforceable  in  courts  of  law.  The  mu- 
tual obligations  of  the  syndicate  toward  its  constituent  members 
and  the  duties  of  the  members  toward  the  syndicate  are  thus 
protected  by  law,  making  it  a  legal  combination. 

' '  The  weak  point  in  this  form  of  organization  is  the  dissension 
that  often  arises  as  to  the  quotas  allowed  the  different  mem- 
bers. Each  company  wants  as  large  an  allotment  as  it  can  get 
and  there  is  disappointment  if  it  is  not  received.  For  this  rea- 
son, upon  the  expiration  of  the  life  of  a  syndicate,  there  is  al- 
ways uncertainty  as  to  whether  it  will  be  renewed  owing  to  the 
competition  among  the  various  constituent  firms. 

"The  object  of  a  syndicate  is  not  monopoly  but  the  preven- 
tion of  competition.  It  is  an  agreement  among  producers  of 
an  article  to  prevent  overproduction,  so  that  the  supply  will 
conform  to  the  demand  and  reasonable  profits  may  be  obtained. 
There  is  no  outcry  in  Germany  against  syndicates;  they  are 
generally  looked  upon  as  organizations  advantageous  to  well- 
regulated  trade. 

"The  German  potash  syndicate,  a  combination  of  76  com- 


GOVERNMENTAL  SOCIALISM  IN  GERMANY      113 

panies,  is  now  practically  in  complete  control  of  the  potash  min- 
ing interests  of  Germany. 

"As  Germany  is  the  only  country  in  the  world  in  which 
potash  mines  are  being  profitably  worked,  and  as  the  mines  are 
controlled  by  one  combination  and  their  production  and  sales  of 
potash  regulated  by  the  special  law  recently  passed  by  the 
Reichstag,  the  German  potash  syndicate  may  be  fitly  termed  a 
legally  reenforced  trust.  The  unworked  potash  field  in  the 
Duchy  of  Brunswick,  Province  of  Hanover,  and  elsewhere  in 
Germany  is  immense,  and  the  kali  supply  is  inexhaustible,  but 
under  the  law,  no  new  mine  or  combination  of  mines  can  be- 
come successful  competitors  of  the  syndicate.  As  soon  as  the 
mine  reaches  the  productive  stage,  it  it  taken  into  the  syndi- 
cate. 

"The  propaganda  conducted  by  the  syndicate  makes  the  de- 
mand for  potash  equal  the  supply.  Special  prices  for  manure 
salts  are  given  by  the  syndicate  to  the  German  agriculturists 
and  special  railroad  rates  for  transportation  are  granted  by  the 
government.  The  syndicate  with  its  representatives  in  the 
United  States  and  in  other  foreign  countries  will  regulate  the 
foreign  prices  for  potash.  This  is  an  important  matter  for 
foreign  agriculturists  and  for  foreign  consumers  of  chlorate  of 
potash  for  the  manufacture  of  powder  and  other  explosives." 

From  the  foregoing,  it  will  be  seen  that  Germany  regulates 
the  trusts  to  secure  the  best  advantage  to  the  public  at  large, 
while  in  America,  the  trusts  after  having  been  allowed  to  reach 
a  high  point  of  development,  through  the  inefficiency  of  the 
government  in  not  enforcing  the  law  as  it  exists,  must  now  be 
regulated  or  reorganized  to  the  great  disturbance  of  business 
and  loss  to  the  general  public. 

Developments  have  proved  that  the  Sherman  law  has  teeth, 
and  that  the  courts  will  enforce  it.  The  fact  that  it  has  not 
been  enforced  is  due  to  the  negligence  of  the  administrations 
of  Harrison,  Cleveland  and  McKinley,  and  only  with  Roosevelt 
was  a  beginning  made.  While  these  presidents  may  be  blamed, 
the  public  itself  is  most  to  blame,  since  it  has  only  been  its 
belated  voice  of  protest  that  has  finally  caused  action,  a  voice 
which  should  have  been  heard  long  ago. 

In  England  trusts  are  very  quickly  killed  by  the  public  boy- 
cotting them.  In  America,  the  slight  advantages  temporarily 
offered  by  the  trusts  overshadows  the  certain  subsequent  higher 
prices,  and  the  public  patronize  them  until  the  small  dealer 


114  THE  PRICE  OF  INEFFICIENCY 

is  exterminated,  later  paying  well  for  its  folly  when  competi- 
tion has  disappeared. 

The  cost  of  breaking  up  or  reorganizing  the  trusts  is  enor- 
mous, both  in  the  direct  expense  of  governmental  legal  actions 
and  in  costs  to  the  trusts  themselves,  while  it  is  incalculable  in 
the  disturbance  to  business. 

The  business  of  a  self  governing  country  is  to  govern  itself. 
When  it  neglects  the  matter,  it  pays  a  frightful  price.  Amer- 
ica is  paying  the  price  to-day,  and  the  paying  is  by  no  means 
nearing  an  end.  Its  future  depends  upon  the  firmness  with  which 
it  proceeds  to  discipline  its  law  breaking  citizens  in  high  places. 

The  responsibility  lies  not  alone  with  the  native  American  but 
with  the  naturalized  voter  as  well,  and  particularly  with  the 
German  voter  who  has  known  better  conditions  in  Germany. 
Naturalized  voters  would  hold  the  balance  of  power  should  they 
act  as  a  unit.  According  to  the  U.  S.  Census  there  are  6,646,817 
foreign  born  white  males  of  voting  age  in  the  United  States  of 
which  number  3,034,117  are  naturalized  or  45.6%.  Seventy  per 
cent,  of  the  1,278,679  Germans  are  naturalized,  the  largest  pro- 
portion, followed  closely  by  the  Irish,  while  only  26%  of  the  737,- 
150  Russians  and  18%  of  the  712,827  Italians  have  become  citi- 
zens. 

Those  who  are  not  well  informed  are  of  the  impression  that 
Americans  are  largely  of  Anglo-Saxon  stock  but  the  figures  dis- 
prove that  belief.  In  the  90  years  from  1820  to  1910  the  im- 
migration was  as  follows :  Germans,  5,400,000 ;  Irish,  4,800,000 ; 
Austro-Hungarian,  3,200,000 ;  Italian,  3,100,000 ;  English,  Scotch 
and  Welsh,  2,800,000;  Russian,  2,400,000;  Swedish,  1,100,000; 
French,  480,000  and  other  countries  about  5,000,000,  a  grand 
total  of  28,000,000.  In  1820  the  population  was  about  9,000,000, 
including  a  considerable  Irish  immigration.  It  is  incontroverti- 
ble from  these  figures  that  the  so-called  Anglo-Saxon  is  but  a 
small  minority  of  the  whole  and  that  the  effort  to  classify  Ameri- 
cans as  an  Anglo-Saxon  race  is  futile. 

Germany  in  the  last  century  has  furnished  us  nearly  6,000,- 
000  immigrants,  and  it  is  obvious,  if  this  element  of  the  popula- 
tion acted  as  a  unit  and  overcame  its  aversion  to  political  activity, 
that  much  greater  efficiency  would  result.  Had  the  German 
ideals  of  public  office  been  enforced  rather  than  existing  systems 
of  patronage  America  would  be  a  much  better  governed  and  more 
prosperous  country  to-day.  It  behooves  the  German  element  to 
rally  to  the  standard  of  good  government  and  overcome  the  dis- 
integrating influences  at  work. 


CHAPTER  X 
MUNICIPAL   SOCIALISM 

A  great  eity-building  epoch — ^How  inventions  have  caused  humanity  to 
gravitate  to  cities — The  reproach  of  city  self  government — German 
civic  pride — Why  home  rule  is  denied  to  our  cities — "Sacred"  concerts 
in  New  York — Liberty  and  the  size  of  spots  on  a  comedian's  vest — 
Lack  of  city  patriotism — Debasing  effects  of  private  ownership  of  public 
franchises — The  battlements  of  commerce — Masterpieces  of  architect- 
ural ugliness — Carnival  of  civic  chaos — Rudiments  of  architectural 
taste  in  engineering  works — Municipal  Art  Commission — The  redeem- 
ing sky  scrapers — Far-sightedness  of  the  planning  of  German  cities  as 
wholes — American  cities  at  the  mercy  of  private  landowners — Barbar- 
ous water  fronts  of  American  cities — German  cities  as  great  land 
owners  and  land  lords — 75  lessons  which  American  cities  may  learn 
abroad. 

The  city  is  the  great  factor  in  the  life  of  the  world  to-day, 
particularly  in  America  and  in  Germanj'.  In  a  little  more 
than  a  generation,  a  great  transposition  has  taken  place.  The 
rural  districts  have  been  drained  of  their  surplus  of  men,  a 
surplus  composed  of  its  best  blood  and  brain.  The  lure  of  the 
city,  its  greater  possibilities  and  advantages  have  produced 
great  changes  which  have  taken  place  rapidly  and  which  are 
continuing  at  the  same  if  not  at  a  more  rapid  rate. 

What  has  brought  about  this  wonderful  change  ?  There  have 
always  been  cities  since  the  earliest  times.  Cities  of  prehistoric 
epochs  are  constantly  being  unearthed,  cities  whose  very  names 
and  existence  were  forgotten  for  ages,  but  never  before  has 
there  been  the  growth  of  cities  at  the  expense  of  the  country 
that  is  now  being  witnessed,  and  the  remarkable  development 
of  the  building  of  cities,  which  makes  the  present  an  epoch  in 
the  history  of  the  world  comparable  with  the  great  city  build- 
ing epochs  of  the  Romans  in  the  age  of  the  Antonines  and  the 
city  building  of  the  middle  ages,  produced  by  political  con- 
siderations. 

The  underlying  cause  of  the  growth  of  cities  in  modem  times 
is  found  in  the  numerous  triumphs  of  invention  during  the  last 

115 


116  THE  PRICE  OF  INEFFICIENCY 

fifty  years.     As  has  been  pointed  out,  every  labor  saving  in- 
vention   reduces    the    stress    between    humanity    and    nature. 
Either  more  human  beings  may  be  fed  and  clothed  and  housed 
at  the  same  outlay  of  human  labor,  or  a  given  number  may  be 
made  much  more  comfortable.     The  invention  of  cloth  making 
machinery  gives  the  working  girl  of  to-day  clothes  which  only 
nobility  could  afford  in  former  ages,  and  the  improvements  in 
iron  and  steel  and  cement  make  houses  far  cheaper  than  for- 
merly.    Harvesting  machinery  and  other  improved  farming  im- 
plements enable  greater  crops  to  be  raised  with  no  more  labor, 
making  food  cheaper.     Summed  up  in  their  collective  effects  the 
enormous  number  of  labor  saving  inventions  have  worked  them- 
selves out  as  a  freeing  from  the  bondage  of  the  soil  of  a  great 
proportion  who  previously  found  it  to  their  advantage  to  re- 
main on  the  farm  to  feed  and  clothe  humanity.     Before  the 
days  of  improved  farm  machinery,  a  hundred  farmers  had  to 
labor,  for  example,  to  supply  the  food  of  a  hundred  city  dwellers, 
while  the  city  dwellers  supplied  the  farmers'  needs  in  manu- 
factured  products.     Now  vsdth   improved    farming   machinery, 
fifty  farmers,  to  assume  a  round  figure,  which  may  or  may  not 
be   correct,   can  supply   the  wants   of  the  same  hundred   city 
dwellers  and  in  addition  of  the  fifty  farmers  who  have  gone  to 
town,  while  the  city  dwellers  wath  their  improved  appliances 
can  supply  the  fifty  farmers  left  in  the  country  and  the  fifty 
who  have  moved  to  town,  with  much  better  goods  at  less  ex- 
penditure  of   labor  than  before.     The   comfort  of   all  is  thus 
greatly  increased,  and  the  less  rigorous  conditions  enable  the 
population  to  increase  more  readily. 

The  extent  to  which  this  process  has  been  carried  on  may  be 
best  understood  by  consulting  the  statistics  of  city  growth. 
Over  40%  of  the  people  of  the  United  States  live  in  cities. 
From  60  to  80%  is  the  ratio  in  some  of  the  eastern  states.  In 
our  population  of  90,000,000  there  are  35,000,000  who  would 
now  be  on  farms  instead  of  in  cities  if  former  conditions  had 
continued. 

In  Germany  a  similar  change  has  occurred  as  will  be  noticed 
from  figures  given  later.  The  city  is  the  thing  of  to-day,  a 
great,  cruel,  criminal  thing  of  poverty  and  disease,  with  vivid 
contrasts  of  wealth,  like  the  glint  of  a  diamond  on  a  scrofulous 
hand,  a  place  where  human  nature  may  find  its  own  level,  high 
or  low,  free  of  the  restraints  of  the  village  and  farm. 
America's  problem,  the  world's  problem  of  to-day  is  the  city, 


MUNICIPAL  SOCIALISM  117 

and  it  is  the  problem  of  problems,  how  humanity  may  best 
direct  itself  for  its  own  good  in  its  new  found  liberties,  how 
the  city  may  be  prevented  from  doing  the  evil  that  is  in  it  and 
made  to  render  its  advantages  to  humanity;  in  short,  how  the 
city  may  be  made  to  make  good. 

The  modern  city,  thus  a  new  thing,  has  brought  new  problems 
and  these  must  be  dealt  with  in  a  new  way.  The  city  in  Amer- 
ica has  proved  a  great  disappointment,  a  reproach  to  republican 
institutions  and  a  well-spring  of  pessimistic  forebodings.  But 
the  city  in  America  has  not  had  a  fair  chance.  Conditions  have 
forced  it  to  pursue  its  growth  along  the  lines  of  least  resistance, 
and  strange  growths  have  resulted,  like  the  roots  of  an  oak 
among  flagstones  and  tombs,  bursting  the  bonds  of  the  past 
and  embedding  their  fragments  in  the  new  growth. 

What  the  possibilities  of  the  American  city  are,  may  be  seen 
from  the  development  of  cities  in  Germany,  where  the  city  has 
had  every  chance,  where  human  nature  and  every  social  force 
works  with  the  city  and  for  its  development,  rather  than  in  op- 
position. The  city  is  the  pride  of  modern  Germany  and  made 
so  by  the  same  class  of  men,  its  leading  business  men,  who 
work  so  tirelessly  against  the  interests  of  the  city  in  America. 

The  American  city  is  poisoned  at  its  well  springs,  principally 
by  three  causes,  none  of  which  operate  to  the  disadvantage  of 
the  German  city. 

Perhaps  the  most  important  is  the  fact  that  American  cities 
do  not  have  home  rule.  Their  affairs  are  regulated  by  legisla- 
tors of  the  state  in  which  the  city  is  located.  Their  form  of 
government  is  imposed  on  them  by  the  state,  their  charters  are 
granted  and  amended  by  the  state  and  their  officials  often  sub- 
ject to  removal  by  the  governor  of  the  state.  The  patronage 
of  the  cities,  their  best  interests  and  everything  that  affects 
them  are  thus  made  the  pawns  of  state  politicians,  and  what  the 
city  might  do  to  better  itself,  the  politicians  of  the  state  usually 
block.  This  they  can  safely  do,  as  they  come,  with  the  excep- 
tion of  the  small  delegation  of  the  city  itself,  from  other  parts 
of  the  state  whose  votes  usually  hold  them  to  no  responsibility 
for  what  has  been  done  to  undermine  the  city's  progress.  In 
fact  the  rural  voter  is  pleased,  rather  than  otherwise,  if  his 
representative  takes  part  in  a  scheme  to  disappoint  the  ambition 
of  the  city. 

]\Iany  brilliant  men  of  municipal  renown,  like  Tom  Johnson 
of  Cleveland,  Sam  L.  Jones  and  Brand  Whitlock  of  Toledo  and 


118  THE  PRICE  OF  INEFFICIENCY 

Hazen  S.  Pingree  of  Detroit,  with  the  best  intereste  of  their 
cities  at  heart,  municipal  patriots  in  fact,  have  worn  out  their 
lives  in  attempting  to  gain  from  rural  legislatoi^  permission  to 
do  for  the  city  what  should  be  done. 

It  amounts  to  a  most  flagi*ant  violation  of  the  first  principal 
of  American  independence,  the  right  of  self  government.  Be- 
sides producing  bad  results  for  all  concerned,  it  has  its  ludicrous 
features  as  well. 

The  "rube"  legislators  of  New  York  State,  for  example,  pre- 
scribe the  nature  of  the  Sunday  recreation  which  may  be  in- 
dulged in  by  the  inhabitants  of  New  York  city.  What  this  may 
degenerate  into  was  well  illustrated  recently  in  a  case  over  the 
violation  of  the  law  against  Sunday  theatrical  performances; 
plays  being  prohibited  while  sacred  concerts  are  permitted. 
The  vaudeville  managers  are  among  the  most  saintly  denizens 
of  this  mundane  sphere,  if  we  judge  by  the  avidity  they  display 
for  giving  ' '  sacred  concerts ' '  in  their  theaters  on  Sundays. 

In  order  to  show  the  public  the  wonders  of  providence,  as 
an  example  to  indolent  humans,  instances  of  the  industry  and 
learning  of  the  lower  animal  kingdom  are  frequently  made  a 
part  of  such  "sacred  concerts"  as,  for  example,  tamed  elephants 
and  mice  and  "Daniel"  in  the  Lion's  Den  with  real  lions. 

Among  the  wonderfully  designed  rules,  however,  by  which 
a  theatrical  performance  is  placed  in  the  goat  column  and  a 
sacred  concert  in  the  lamb  brigade,  is  the  prohibition  of  costume 
and  changes  of  scenery  and  the  use  of  a  curtain.  Thus  in  a 
"sacred  concert"  a  single  setting  is  used,  the  curtain  remains 
up  throughout  the  evening  and  the  performers  appear  in  their 
street  attire. 

On  one  historic  occasion,  a  comedian  appeared  wearing  a 
vest  with  prominent  spots  of  purple.  He  was  arrested  on  the 
charge  of  taking  part  in  a  theatrical  performance,  namely  of 
appearing  in  costume.  He  denied  the  allegation  and  asserted 
that  the  spots  on  his  vest  were  merely  an  evidence  of  his  per- 
sonal taste.  He  wore  them  on  the  street  that  way  because  he 
liked  them  large.  The  arresting  officer  declared  they  compared 
in  size  with  fried  eggs  but  the  comedian  considered  them  as 
representing  plums.  The  controversy,  thus,  between  the  mighty 
opposites  of  church  and  the  amusement  world,  of  rural  restraint 
and  city  liberty,  resolved  itself  into  a  judicial  interpretation  of 
the  size  of  spots  on  a  vest;  the  magistrate  deciding  that  in  the 


MUNICIPAL  SOCIALISM  119 

particular  ease,  though  extreme,  the  comedian's  taste  was  not 
illegal.     Thus  was  justice  vindicated. 

In  New  York,  however,  the  city  has  reached  a  point  where 
its  delegation  in  the  legislature  is  almost  as  large  as  the  rest 
of  the  state  combined.  AVhen  New  York  city  gains  the  majority, 
it  will  be  the  first  city  in  America  to  have  home  rule,  and  to 
control  the  state  as  well  as  itself.  Provided  politicial  divisions 
do  not  vitiate  this  control,  the  city,  responsilile  to  itself  alone 
should  make  considerable  progress,  which  now  lies  beyond  its 
legal  powers. 

American  cities,  too,  have  always  lacked  the  political  in- 
dividuality of  the  European  city.  The  American  city  is  young. 
It  has  not  existed  for  centuries,  as  have  most  of  the  large 
European  cities,  and  there  have  never  been  times  when  an 
American  city  Avas  a  sovereign  power,  as  has  been  the  case  with 
European  cities  in  past  ages.  The  American  state  has  always 
been  the  smallest  sovereign.  Even  this  was  more  theoretical 
than  real  and  existed  only  for  a  short  time  in  the  ease  of  the 
original  thirteen  colonies  a  century  and  a  third  ago.  The 
American  thus  has  had  no  occasion  to  feel  any  patriotic  inter- 
est in  his  city.  No  Philadelphian  for  example  would  ever  con- 
ceive taking  up  any  more  deadly  arms  against  New  York  or 
Pittsburg  than  a  baseball  bat. 

In  Germany,  however,  the  remains  of  the  former  sovereignty 
of  cities  are  still  seen  as  in  Hamburg,  Liibeck  and  Bremen, 
where,  as  members  of  what  was  once  the  Hanseatic  League,  they 
have  individually  representation  in  the  Reichstag  as  independent 
states  \nth  certain  important  exemptions  and  privileges. 

The  city  in  America  is  not  thus  the  firm  unit  that  it  is  abroad, 
and  not  the  rallying  point  of  patriotism.  The  average  Amer- 
ican feels  more  pride  in  Washington  as  a  city  than  he  does  in 
his  own  town,  and  this  lack  of  interest  wall  always  work  more 
or  less  against  the  development  of  American  cities. 

Private  ownership  of  public  utilities,  the  great  profits  arising 
from  franchises  of  various  kinds,  principally  street  railway's, 
and  the  letting  of  great  contracts  of  construction  to  private 
bidders,  is  the  second  cause  that  degrades  city  government  in 
the  United  States. 

The  merchants  and  business  men  interest  themselves  in  secur- 
ing from  the  city  these  valuable  rights,  and  a  large  body  of 
the  most  aggressive  men  in  any  city,  as  well  as  outside  capital- 
ists, are  generally  interested  either  directly  or  indirectly  in  in- 


120  THE  PRICE  OP  INEFFICIENCY 

ducing  the  city  to  grant  them  the  franchise,  and  in  preventing 
competitors  from  getting  the  prize.  In  this  endless  struggle 
for  franchises  and  valuable  concessions,  the  officials  of  the  city 
having  power  to  make  the  grants  are  subjected  to  every  species 
of  influence,  social,  fraternal,  political  and  financial,  that  can 
be  devised.  Fights  over  franchises  thus  debauch  the  city 
government,  and  distract  attention  from  other  necessities  of  the 
city. 

In  Germany,  where  the  cities  largely  operate  their  own  pub- 
lic utilities,  no  such  condition  exists,  for  the  simple  reason  that 
no  rich  franchise  prizes  are  at  stake.  Public  operation  of  pub- 
lic utilities  will  undoubtedly  prove  for  American  cities,  one  of 
the  greatest  blessings  that  can  ever  come  to  them,  if  properly 
carried  out. 

And  this  form  of  municipal  socialism  will  jjrove  much  more 
of  a  success  than  it  has  when  the  system  of  longer  tenures  of 
ofKce  is  applied,  and  the  commission  form  of  government  more 
generally  adopted.  The  constant  changes  of  administration 
and  personnel  disorganize  the  forces  of  municipally  operated 
utilities,  and  thus  play  into  the  hands  of  capitalists,  who  desire 
to  continue  the  present  system,  by  furnishing  bad  examples  of 
public  operation. 

A  third  cause  of  the  lack  of  progress  of  American  cities  is 
found  in  the  high  regard  accorded  the  rights  of  private  prop- 
erty. The  principle  that  a  man's  house  is  his  castle  is  carried 
to  such  an  extreme  that  the  castle  becomes  a  mountain  of  in- 
convience  not  to  say  of  loss  and  damage  to  every  one  else. 

In  most  American  cities,  a  man  may  build  any  sort  of  house 
that  pleases  him,  wherever  he  may  own  or  lease  the  land.  This 
unbridled  liberty,  or  license,  more  properly  speaking,  has  pro- 
duced incongruous  and  heterogeneous  cities  principally  dis- 
tinguished as  collections  of  buildings  which  are  masterpieces 
of  ugliness. 

Although  this  system  or  lack  of  system  has  produced  the  great 
skyscrapers  of  New  York  and  other  large  cities,  evolving  in  an 
artistic  sense  an  architecture  distinctively  American,  it  has  had 
the  effect  of  making  American  streets  strings  of  unrelated  struc- 
tures in  which  all  sense  of  beauty  and  proportion  is  lost. 

It  is  a  matter  of  wonder,  passing  through  an  American  city, 
where  the  hordes  of  utterly  unfit  architeets  have  come  from  that 
have  filled  the  land  with  such  frightful  examples  of  their  art. 
How  the  American  can  feel  any  interest  in  the  purely  util- 


T^IUNICIPAL  SOCIALISM  121 

itarian  business  buildings  in  which  he  transacts  his  affairs,  or 
any  attachment  to  the  conglomeration  of  rooms  he  calls  his 
home,  is  difficult  to  see.  Indeed,  it  is  surprising  how  he  can 
find  the  place  he  calls  home,  for  on  many  streets  whole  blocks 
of  houses  will  either  be  duplicates  of  each  other  or  in  two 
series  of  duplicates,  each  alternate  house  being  similar,  like 
an  endless  sandwich  with  layers  of  bread  and  corned  beef  in- 
definitely. 

America  is  only  waking  up,  only  commencing  to  exist  archi- 
tecturally. Some  of  the  sky  scrapers  and  some  of  the  public 
and  private  buildings  are  good,  but  the  taste  of  the  public  is 
not  yet  formed.  An  ugly  house  is  simply  a  house.  It  gives 
no  pain  on  account  of  being  ugly,  for  the  eye  of  the  public  is 
uneducated  and  as  little  troubled  by  bad  architecture  as  the 
eye  of  the  illiterate  by  bad  spelling. 

Mr.  Ernest  Flagg,  designer  of  the  Singer  Building,  and  of 
many  other  notable  structures,  in  an  article  "Are  American 
Cities  Going  Mad  Architecturally?"  in  the  New  York  Times 
of  August  6,  1911,  describes  conditions  truthfully  when  he 
says: 

"Our  artistic  sense  is  undeveloped.  There  is  no  great  body 
of  amateurs  here,  such  as  is  found  in  more  refined  communities, 
who  are  capable  of  analyzing  our  productions  and  placing  them 
at  their  true  worth.  It  is  only  a  question  of  time,  however, 
when  public  taste  will  become  more  cultivated,  and  when  that 
time  does  come,  there  will  be  a  great  tumbling  of  reputations 
which  now  stand  high. 

"Our  architecture  smacks  too  much  of  archaeology;  it  is  not 
modern;  we  use  modern  methods  of  construction  and  antique 
methods  of  design.  Why  do  not  the  people  in  the  United 
States  recognize  that  every  great  work  of  art  which  has  had  an 
underlying  reputation  was  strictly  modern  when  it  was  made? 
No  copy,  or  adaptation,  no  matter  how  cleverly  done,  can  endure 
the  test  of  time  and  stand  as  a  work  of  art. 

"We  are  veritable  barbarians  in  matters  of  taste,  we  ran- 
sack Europe  for  old  fragments  which  though  they  may  be 
charming  in  their  original  situation,  become  little  better  than 
so  much  rubbish  when  set  up  in  the  midst  of  inharmonious 
surroundings.  We  deck  out  our  houses  and  gardens  with  these 
things  in  precisely  the  same  w^ay  and  with  as  little  regard  to 
propriety  as  savages  when  they  array  themselves  wath  incon- 
gruous objects  which  they  obtain  from  European  traders. 


122  THE  PRICE  OF  INEFFICIENCY 

''The  savages  which  Henry  Hudson,  on  his  second  visit, 
found  wearing  the  hatchet  heads  he  had  sold  them,  as  neck 
ornaments,  present  no  more  comical  picture  than  our  art  ama- 
teur often  does  in  his  use  of  spoils  from  European  churches 
and  monasteries. 

"One  sees  gardens  attached  to  shingled  cottages,  decked  out 
with  marble  seats,  vases  and  fountains  taken  from  Italian 
villas.  Houses  in  our  cities  are  fitted  out  with  fragments  from 
European  palaces  which  are  as  much  out  of  harmony  with  the 
surroundings  as  a  steam  engine  would  be  in  a  medieeval  church. 
Sometimes  whole  interiors  have  been  taken  from  a  European 
building  and  set  up  here.  Rich  men's  houses  are  turned  into 
museums,  where  there  are  as  many  styles  as  there  are  rooms, 
all  warring  with  each  other  and  with  the  exterior  of  the  build- 
ing. 

""VVe  have  been  having  a  very  carnival  of  vulgarity,  and  an 
ostentatious  display  of  wealth  and  bad  taste  by  people  who 
are  regarded  as  leaders  in  refinement. 

"In  the  midst  of  the  chaos  and  confusion,  with  the  public 
taste  at  as  low  an  ebb  as  it  probably  ever  reached  among  peo- 
ple who  pretend  to  be  civilized,  with  architecture  for  the  most 
part  in  the  hands  of  men  who  had  little  training  in,  or  knowl- 
edge of,  even  the  elementary  principles  of  design,  our  new 
methods  of  building  were  ushered  in  and  we  were  called  upon 
to  deal  with  a  problem  the  proper  solution  of  which  called  for 
a  more  technical  and  artistic  skill  than  we  possessed. 

"The  time  is  at  hand  when  the  absurdity  and  bad  taste  of 
our  past  methods  will  be  fully  understood  and  freely  admitted. 
We  shall  cease  to  wonder  that  cultivated  foreigners  are  not 
favorably  impressed  by  our  tall  buildings,  and  will  set  our- 
selves to  work  to  make  them  as  perfect  and  reasonably  artistic 
as  they  are  ingenious  and  daring  mechanically  and  construc- 
tively." 

The  lack  of  artistic  feeling  for  architecture  has  its  counter- 
part in  not  only  other  structures,  such  as  bridges,  docks  and 
terminals,  but  also  in  various  kinds  of  designs  where  the  utili- 
tarian purpose  crowds  out  every  other  consideration.  Engi- 
neers particularly  design  their  works  with  little  attention  to 
the  beautiful  and  in  the  most  important  feature  of  modern 
times,  the  rapidity  with  which  the  numerous  discoveries  in 
science  are  applied  to  commercial  purposes,  be  it  for  a  peace- 
ful gigantic  liner,  or  a  powerful  and  destructive  dreadnought, 


MUNICIPAL  SOCIALISM  123 

or  for  a  stupendous  bridge  structure  spanning  the  Hudson  or 
Mississippi,  or  the  housing  of  machinery  for  science  and  art 
for  the  utilization  of  natural  resources  of  the  Niagara,  or  the 
many  other  phenomenal  power  resources,  all  of  which,  with 
thousands  of  others  are  monuments  to  modern  sciences;  there 
is  lacking  in  all  the  touch  of  artistry. 

In  order  to  have  such  engineering  undertakings  appeal  to 
the  public  or  layman,  it  is  essential  to  give  them  consideration 
from  the  artistic  standpoint,  and  this  is  doubly  important  when 
such  structures  are  to  be  located  in  the  vicinity  of  a  consider- 
able community.  To  secure  such  effects  it  is  advisable  that  the 
engineer  associate  himself  with  an  architect,  as  the  engineer, 
though  a  good  statistician  and  mathematician,  rarely  combines 
these  qualities  with  architectural  knowledge  and  particularly 
with  artistic  feeling. 

As  these  structures  form  an  important  feature  in  modern 
practice,  they  should  be  of  special  interest  to  the  architect  as 
being  work  for  w'hich  his  particular  training  has  made  him 
efficient,  and  if  he  is  to  maintain  the  traditions  of  the  past,  it 
is  necessary  that  he  should  take  a  like  interest  in  the  progress 
of  modern  times,  w^hich  to  the  greatest  extent  is  covered  by 
engineering  skill,  although  this  does  not  seem  perfectly  clear 
to  the  mind  of  the  layman. 

While  notable  achievements  are  to  the  credit  of  the  modern 
American  architect,  and  while  numerous  individual  buildings 
compare  favorably  with  the  best  work  of  European  architects, 
the  failure  of  American  city  architecture  as  a  whole  lies  import- 
antly in  the  fact  that  each  building  is  designed  for  itself  alone, 
as  if  the  eye  of  the  spectator  could  see  but  one  object  at  a  time. 
No  attention  whatever  is  paid  to  adjoining  buildings,  indeed 
the  architect  seems  to  have  taken  a  page  from  the  writer  of 
advertisements  who  endeavors  to  have  contiguous  advertise- 
ments as  dissimilar  as  possible,  thus  attracting  attention  by  the 
harsh,  not  to  say  painful,  contrast  between  them.  There  are 
in  New  York  and  in  other  cities,  numerous  examples  of  build- 
ings which  have  been  designed  with  the  idea  of  making  them 
"stand  out"  by  being  as  complete  and  abrupt  a  contrast  as 
possible  to  the  previously  erected  buildings. 

The  freedom  accorded  to  private  ownership  has  made  such 
monstrosities  possible. 

The  German  city,  on  the  other  hand,  has  gro-^Ti  beautiful  by 
denying  the  right  of  the  individual  to  disfigure  the  landscape 


124  THE  PRICE  OF  INEFFICIENCY 

at  his  own  sweet  will,  on  the  only  condition  that  he  pays  the 
carpenter  and  the  mason. 

The  city  as  a  whole  is  planned,  then  its  streets  as  wholes, 
and  the  buildings  then  are  permitted  to  be  built  only  in  ac- 
cordance with  the  general  scheme  which  has  been  laid  out. 

]\Ir.  Frederick  C.  Howe,  an  eminent  authority  on  the  subject, 
in  "City  Building  in  Germany"  in  Scrihner's  Magazine  of 
May,  1910,  states: 

"I  know  of  no  cities  in  the  modern  world  which  compare 
with  those  which  have  arisen  in  Germany  during  the  past 
twenty  years.  There  are  none  in  Great  Britain,  from  which 
country  official  delegations  are  constantly  crossing  the  North 
Sea  to  study  the  achievements  of  the  German  city.  There  are 
none  in  France,  in  which  country  the  building  of  cities  has 
made  but  little  progress  since  the  achievements  of  Baron  Houss- 
man  made  Paris  the  beautiful  city  that  it  is. 

"Important  as  is  the  honesty  and  the  efficiency  of  the  Ger- 
man city,  it  is  the  bigness  of  vision,  boldness  of  execution  and 
far-sighted  outlook  on  the  future  that  are  most  amazing. 
Germany  is  building  her  cities  as  Bismarck  perfected  the  army 
before  Sadowa  and  Sedan;  as  the  Empire  is  building  its  war 
ships  and  merchantmen;  as  she  develops  her  waterways  and 
educational  systems.  In  city  building  as  in  other  matters,  all 
science  is  the  hand  maiden  of  politics.  The  engineer  and  the 
architect,  the  artist  and  the  expert  in  hygiene  are  alike  called 
upon  to  contribute  to  the  city's  making.  The  German  cities 
are  thinking  of  to-morrow  as  well  as  of  to-day,  and  the  gener- 
ations to  follow  as  well  as  the  generation  that  is  now  upon  the 
stage.  Germany  alone  sees  the  city  as  the  center  of  the  civili- 
zation of  the  future,  and  Germany  alone  is  building  her  cities 
so  as  to  make  them  contribute  to  the  happiness,  health  and 
well-being  of  the  people.  This  seems  to  be  the  primary  con- 
sideration.    And  it  is  unique  in  the  modern  world. 

"Farsightedness  characterizes  Germany  in  all  things. 
Alone  among  the  nations  of  the  earth,  Germam^  is  treating  the 
new  behemoth  of  civilization  as  a  creature  to  be  controlled,  and 
made  to  serve  rather  than  to  impair  or  destroy  humanity.  In 
city  building  as  in  other  things,  Germany  calls  in  her  experts. 
If  they  do  not  already  exist,  she  creates  them.  Town  planning 
has  become  a  science,  just  as  much  a  science  as  the  building  of 
engines.  And  it  is  treated  as  such.  A  school  has  recently 
been  opened  in  Berlin  devoted  to  the  subject.     Exhibition  of 


MUNICIPAL  SOCIALISM  125 

things  municipal  and  congresses  of  various  kinds  are  promoted. 
There  has  grown  up  a  substantial  literature  on  city  building. 
There  are  experts  like  Stubben,  Fisher,  Gurlett  and  Baumeis- 
ter,  who  go  from  city  to  city  and  consult  with  the  local  author- 
ities on  their  projects.  Nothing  is  haphazard.  Nothing  is  left 
to  chance.  The  get-rich-speculator  and  the  jerrj'-builder  are 
subordinated  to  the  will  of  the  community  acting  through  its 
permanent  and  expert  body  of  city  officials. 

"The  German  city  is  being  built  on  a  scale  of  generosity 
which  halts  at  no  expense.  Its  public  school  buildings  rival  in 
splendor  the  best  modern  buildings  of  our  great  universities. 
And  the  equipment  is  of  the  same  order.  I  know  of  no  public 
schools,  even  in  New  York  or  Boston,  that  seem  as  costly  in 
their  construction  or  more  complete  in  every  detail  than  those 
of  half  a  dozen  German  cities.  They  contain  assembly  rooms 
and  vestibules  of  the  most  artistic  sort,  while  the  gymnasiums 
and  provisions  for  recreation  are  equal  to  those  of  the  best 
schools  iu  America.  And  when  we  consider  the  relative  poverty 
of  the  German  people  and  the  burdens  of  taxation  and  arma- 
ments, the  attitude  of  our  own  cities  toward  these  matters 
seems  positively  parsimonious  and  niggardly. 

"German  cities  recognize  the  controlling  influence  of  the 
land  on  the  life  of  the  communit}-,  and  they  have  become  great 
landlords.  The  town  of  Breslau,  with  a  population  about  the 
size  of  Cleveland,  Ohio,  owns  twenty  square  miles  of  land,  or 
12,800  acres.  But  Berlin  is  the  greatest  landlord  of  all.  That 
city  owns  39,000  acres,  mostly  outside  of  the  city,  while  Munich 
owns  13,000  acres,  and  Strassburg,  12,000  acres.  German 
cities  also  possess  great  forests  and  they  are  constantly  adding 
to  their  possessions. 

"The  motive  of  all  this  beauty,  harmony,  business  enterprise 
and  foresight  is  so  obvious  to  the  German  that  he  cannot  com- 
prehend why  it  should  be  questioned.  "Whj^  does  a  merchant 
erect  a  fine  store-room  or  build  himself  a  mansion?"  he  asks. 
The  German  city  thinks  as  an  individual  thinks  about  his  busi- 
ness and  his  home.  A  finished  city  attracts  people.  It  brings 
manufacturers  and  business.  People  choose  a  beautiful  city 
as  a  place  of  residence.  Visitors  make  pilgrimages  to  it. 
AVell-educated  children  make  better  citizens,  better  artisans. 
The  street  railways,  gas  works,  docks  and  other  enterprises  pay 
their  way.  They  even  make  money.  But  more  than  this,  they 
are  a  necessary  part  of  the  city,  and  of  course  they  should  be 


126  THE  PRICE  OF  INEFFICIENCY 

owned  by  it.  If  it  be  suggested  that  all  this  is  socialistic,  the 
German  business  man  shrugs  his  shoulders  and  says,  "It  may 
be,  but  it  is  good  business. "  It  is  much  better  than  good  busi- 
ness, it  is  good  statesmanship." 

At  a  meeting  of  the  City  Club,  New  York,  December  4, 
1911,  the  German  Envoy,  Count  Von  Bernstorff,  tells  how  munic- 
ipalities in  Germany  are  governed  and  stated  in  part  as  fol- 
lows : 

"To  be  a  Burgherr  of  a  city  in  Germany,  one  must  have  a 
definite  and  tangible  interest  in  the  community.  In  the  theory 
and  practice  of  city  government  in  Europe,  a  city  has 
always  been  regarded  as  a  corporation  which  had  business  to 
conduct  and  property  to  administer.  According  to  this  theory, 
a  distinction  is  made  between  the  civil  and  political  rights,  on 
one  side,  and  on  the  other,  what  may  be  called  municipal  rights, 
the  right  to  take  active  part  in  administering  city  property  and 
determining  city  polic3^  As  to  the  latter  right,  it  is  felt  in 
Germany  that  the  people  exercising  it  should  have  some  evi- 
dent stake  in  the  corporation  whose  affairs  they  are  called 
upon  to  administer  and  control. 

"The  first  thing  that  will  strike  a  foreigner  in  German  cities 
is  the  number  and  variety  of  the  functions  with  which,  for  the 
benefit  of  the  citizens,  the  public  authority  charges  itself. 

"In  a  modern  German  town,  new  streets  are  not  the  creation 
of  private  enterprise.  The  town  council  lays  out  the  streets 
in  accordance  with  the  interests  and  needs  of  the  whole  popu- 
lation. There  are  no  restrictions  as  to  the  width  of  them  or 
of  their  construction.  The  council  is  in  full  control  and  can 
do  as  it  pleases.  In  this  way,  open  spaces  are  distributed  all 
over  the  city.  The  council  also  decides  what  classes  of  build- 
ings are  to  be  erected.  Some  districts  are  devoted  to  factories, 
others  to  mixed  quarters,  where  both  dwelling  houses  and  work 
shops  may  be  erected,  while  the  rest  is  set  aside  for  a  residen- 
tial district. 

"Most  town  councils  not  only  supply  water,  gas,  electric 
lighting  and  power,  and  make  a  good  profit  in  relief  of  local 
expenditure,  but  also  finance  all  the  hospitals,  treatment  of 
phthisis,  and  all  the  schools,  including  colleges  for  advanced 
technical  instruction.  In  most  places  the  municipalities  own 
and  work  the  tramways  with  very  low  fares  and  very  high 
profits;  they  maintain  fire  stations  with  the  most  advanced  ap- 
paratus and  they  have  abattoirs  regulated  by  veterinary  science 


MUNICIPAL  SOCIALISM  127 

for  the  slaughter  of  animals  for  human  food.  In  such  cities 
as  Cologne,  Frankfort  and  Manheim  they  manage  enormous 
docks  for  the  accommodation  of  fresh  water  navigation ;  they 
maintain  for  the  recreation  of  the  citizens  museums,  picture 
galleries,  parks,  playgrounds,  baths,  bands  of  music  and  even 
theaters. 

"The  city  of  Frankfort,  for  instance,  and  the  institutions 
under  its  control,  possess  within  its  boundaries  12,800  acres  of 
land,  that  is,  more  than  half  the  entire  area  of  the  city.  Out- 
side, the  municipality  owns  3,800  acres  of  land,  making  a  total 
of  16,600  acres.  Of  this,  8,500  acres  are  covered  with  wood, 
which  will  probably  be  used  for  building  purposes.  The 
largest  part  of  the  timber  is  produced  by  the  municipal  forest,  or 
Stadtwald,  purchased  from  the  German  emperors  at  the  end 
of  the  fourteenth  century. 

"Now  with  reference  to  the  provision  of  good  and  healthy 
dwellings  for  the  working  classes,  there  are  in  Frankfort,  as 
in  all  large  and  ancient  cities,  a  number  of  undesirable  dwell- 
ings. But  the  area  in  which  these  dwellings  exist  is  con- 
stantly decreasing,  because  the  dwellings  are  being  transformed 
into  offices.  A  great  many  old  houses  have  disappeared,  owing 
to  the  laying  out  of  new  streets.  These  new  streets,  which  cost 
many  millions  of  marks,  were  made  chiefly  to  secure  better 
lines  of  communication,  but  at  the  same  time  they  have  im- 
proved the  housing  conditions.  The  building  regulations  also 
tend  in  this  direction.  At  a  very  early  period  regulations  ex- 
isted which  forbade  the  erection  of  unhealthy  houses. 

"Berlin,  Cologne,  Munich,  Dresden  and  Frankfort  are  rich 
in  landed  estates,  which  form  a  large  part  of  the  city's  assets. 
Leipsic  is  one  of  the  cities  which  has  devoted  a  portion  of  its 
real  estate  to  the  housing  of  the  working  classes.  That  munic- 
ipality has  leased  for  a  hundred  years  at  a  low  rent  to  a  phil- 
anthropic building  society,  a  large  piece  of  communal  land  in 
the  environs  for  the  erection  of  cheap  houses.  The  majority 
of  the  houses  have  to  contain  three  and  some  of  them  more  than 
four  rooms.  This  society  cannot  transfer  its  leasehold  rights 
to  third  parties  without  the  consent  of  the  municipality,  and 
in  the  event  of  doing  so,  both  the  offending  contract  and  the 
lease  itself  may  be  canceled. 

"The  munieipalit}''  undertook  the  initial  construction  of  all 
squares,  roads  and  footpaths,  and  went  further  in  undertaking 
to  advance  money  on  mortgages  for  building  purposes  should 


128  THE  PRICE  OF  INEFFICIENCY 

the  building  society's  revenues  prove  inadequate,  with  the  pro- 
vision that  the  society  must  refund  the  loan  by  regular  repay- 
ments in  such  a  manner  that  on  termination  of  the  lease  the 
mortgage  will  be  redeemed. 

"The  following  is  the  method  of  town  planning  followed 
by  the  municipality.  First  of  all,  a  plan  is  made  showing  the 
general  scheme  of  the  proposed  new  streets.  The  public  is  in- 
vited to  inspect  the  plan,  and  objections  are  received  and  con- 
sidered by  the  body  which  has  to  sanction  the  plans,  and  which 
is  known  as  the  Bezirksausschuss. 

"Only  after  the  plan  has  been  approved  are  buildings  per- 
mitted to  be  erected.  It  is  in  the  interests  of  the  land  owners 
that  the  street  plans  should  be  approved,  and  it  rarely  happens 
that  sanction  has  to  be  refused  to  a  plan  on  account  of  objec- 
tions brought  against  it.  Of  course,  the  municipality  could 
not  exercise  this  power  of  town  planning  unless  they  had  the 
power  by  expropriation.  This  power  is  given  by  law,  and  there 
is  no  need  to  go  to  Parliament  for  special  powers  in  a  case 
where  expropriation  is  necessary.  But  as  a  matter  of  fact,  it 
is  rarely  used. 

"Within  the  last  ten  years,  the  city  of  Frankfort  has  ex- 
pended more  than  $50,000,000  in  the  purchase  of  land.  In 
German  towns  all  works  which  have  the  character  of  a  monop- 
oly are  to  a  great  extent  municipalized." 

Municipal  socialism,  thus  so  far  advanced  in  Germany,  is 
one  of  the  large  subjects  of  modern  progress.  Its  ramifications 
and  advantages  are  both  numerous  and  beneficial.  A  brief 
summary,  including  some  seventy-five  items,  of  the  principal 
concrete  lessons  to  be  learned  by  America  abroad,  is  given  in 
the  New  York  World  of  October  1,  1911 : 

STREETS;   BILLBOARDS;   PAVING;    LAMP-POSTS;    SEWAGE   DISPOSITION. 

1.  In  Berlin,  Frankfort  and  many  other  German  cities, 
street  advertising  is  practically  confined  to  comer  pillars. 
There  are  no  billboards  erected  on  vacant  lots  to  conceal  refuse, 
shelter  vagrants  and  lower  values. 

2.  The  German  capitals  require  that  news-stands  and  street- 
booths  shall  contribute  to  rather  than  mar  the  vista. 

3.  Paris  has  numerous  isles  of  safety  in  the  middle  of  its 
streets,  with  artistic  lamp-posts.  These  light  both  sides  of  the 
street  and  reduce  the  number  of  lamps  to  two-thirds  or  one- 
half  the  number  needed  where  the  posts  are  at  the  curbs. 


MUNICIPAL  SOCIALISM  129 

4.  Belgium  has  a  national  society  for  the  introduction  of  art 
in  the  streets.  Particular  attention  is  paid  to  street  fixtures 
— lamp-posts,  street-name  signs,  house  numbers,  tramway 
stations,   public-comfort   stations,   letter-boxes,   fire-alarms,   etc. 

5.  Practically  all  German  cities  save  Hamburg  have  strict 
regulations  to  prevent  offensive  illuminated  signs, 

6.  The  sewers  of  Paris  are  also  pipe  galleries,  carrying  tele- 
graph and  telephone  wires,  water  pipes,  pneumatic  tubes  for 
letters  and  pipes  for  compressed-air  service. 

7.  Glasgow  has  iron  bins  with  hinged  lids  sunk  along  the 
curbing  and  into  these  the  street  litter  is  brushed  during  the 
day. 

8.  Vienna  uses  covered  ash-carts.  Curtains  attached  to  the 
frame  are  pushed  aside  while  ashes  are  emptied,  thus  prevent- 
ing the  dust  from  littering  the  streets. 

9.  The  German  cities  have  ordinances  which  suppress  most 
of  the  street  and  waterside  noises  common  to  New  York — the 
flat  car-wheel,  the  night-long  shrieking  of  tugboats,  the  blatant 
automobile  horn,  the  scissors-grinder's  bell,  the  peanut-vendor's 
steam  whistle,  the  cries  of  sidewalk  merchants. 

10.  Traffic  regulations  have  been  so  skillfully  drawn  and 
firmly  enforced  in  London  that  traffic  now  practically  regulates 
itself. 

11.  Cologne,  Hanover  and  other  German  cities  are  well  pro- 
vided with  waste-paper  receptacles.  They  look  more  like  vases 
than  garbage-cans,  and  are  made  of  iron  strips  fastened  to 
lamp-posts  or  trolley  or  telegraph  poles. 

12.  Paris  is  cleaned  and  scrubbed  every  day  before  it  awakes. 
Between  4  and  6  A.  M.  all  the  streets  and  sidewalks  are  swept, 
and  many  of  them  washed  and  disinfected. 

13.  Paris  fines  householders  who  do  not  take  in  the  emptied 
ash-can  by  7  o'clock. 

14.  Glasgow  sweeps  its  streets  at  night. 

15.  Berlin  has  done  best  what  most  other  European  cities 
have  done  well.  At  a  cost  of  $30,000,000  it  has  constructed  a 
sewage-farms  system  covering  an  area  almost  equal  to  its  own. 
Barren  heath  land  was  acquired  well  beyond  the  corporation 
limits  and  is  being  reclaimed  by  wastes  which  are  pumped  to 
it  from  central  stations.  The  farms  return  a  considerable 
revenue. 


130  THE  PRICE  OF  INEFFICIENCY 

MUNICIPAL    THRIFT    ABROAD;    FUEL    FROM    STREET    WASTE. 

16.  Stuttgart  gets  a  revenue  from  its  parks  and  other  tree- 
covered  areas.  These  are  under  control  of  a  forestry  bureau 
which  obtains  enough  money  from  timber  and  firewood  to 
maintain  lawns  and  paths,  pay  salaries  and  turn  over  50 ^o  of 
its  gross  receipts  to  the  city. 

17.  Amsterdam  converts  street  wastes  into  fuel  briquettes. 
These  are  produced  at  $1.15  a  ton  and  sold  at  $1.40,  making  a 
profit  of  over  $20,000  a  year.  Heretofore  this  waste  has  been 
disposed  of  at  an  annual  loss  of  $18,000. 

18.  When  Frankfort  lays  out  parks,  boulevards  or  docks  it 
condemns  land  in  excess  of  its  needs  and  pays  for  the  whole 
enterprise  by  reselling  the  surplus  and  thus  reaping  the  bene- 
fits of  the  new  values.  There  is  no  "honest  graft"  from  "in- 
siders' tips"  as  to  land  to  be  benefited. 

19.  According  to  Frederic  C.  Howe  in  the  Scrihner's  of  1910, 
"there  are  1,500  smaller  towns  and  villages  in  Germany  which 
derive  so  much  revenue  from  the  lands  which  they  own  that 
they  are  free  from  all  local  taxes.  Five  hundred  of  these  com- 
munities are  not  only  free  from  all  local  taxes  but  are  able  to 
declare  a  dividend  of  from  $25  to  $100  a  year  to  each  citizen  as 
his  share  of  the  surplus  earnings  of  the  common  lands." 

20.  The  cities  of  Continental  Europe  consider  beauty  a 
municipal  asset  with  a  tangible  cash  value  in  that  it  makes  life 
more  enjoyable,  elevates  the  public  taste  and  brings  in  tourists. 

BEAUTY  IN  ELEVATED  ROADS;  CLOCKS  IN  STREET  CARS. 

21.  In  Dresden  and  other  cities  surface  cars  do  not  stop  at 
every  corner.  Stopping-places  are  about  220  yards  apart  and 
are  marked  by  a  post  and  shield.  This  permits  the  making  of 
much  better  time. 

22.  In  Berlin  and  most  other  German  cities  if  you  jump  on 
a  street  car  in  motion  you  are  required  to  alight  at  the  next 
stopping-place. 

23.  Berlin's  elevated  roads  are  so  designed  as  not  greatly  to 
detract  from  the  sightliness  of  streets.  The  posts  and  girders 
almost  realize  Russell  Sage's  dream  of  an  "ornamental  iron 
structure"  and  the  most  uncompromising  parts  are  masked  by 
trees. 

24.  Berlin  has  so  deadened  the  noise  of  passing  elevated 
trains  by  flooring  the  structure  with  masonry  that  in  concert 


MUNICIPAL  SOCIALISM  131 

halls  underneath  one  can  listen  with  enjoyment  to  orchestral 
music. 

25.  Bremen  does  not  permit  the  street  cars  to  carrj^  passen- 
gers in  their  aisles  and  strictly  limits  the  number  on  platforms. 

26.  Hildesheim  and  many  other  German  cities  have  clocks  in 
all  street  cars. 

POLITICS    AND    ADMINISTRATION;     POLICEMEN     WHO    ARE    TRUSTED. 

27.  Such  is  the  dignity  of  London's  County  Council,  such  is 
British  public  spirit,  that  Cabinet  Ministers  do  not  disdain  to 
sit  in  it. 

28.  The  police  of  Plauen  inspect  the  moving-picture  theaters 
twice  a  week  and  a  majority  of  the  school-teachers  assist  them. 

29.  When  a  policeman  brings  a  prisoner  before  a  London 
Magistrate,  "the  Judge  treats  him  as  an  impartial,  honest  and 
fearless  personification  of  the  law  of  the  land — practically  con- 
sults him  as  to  what  he  thinks  should  be  done  with  the  defend- 
ant in  minor  cases.  .  .  .  Here  the  policemen  is  the  man 
on  trial."  The  words  are  those  of  William  McAdoo,  former 
New  York  Police  Commissioner,  now  head  of  the  Board  of  City 
Magistrates. 

30.  London  largely  separates  the  detectives  from  the  uni- 
formed force.  As  Mr.  McAdoo  says:  "They  are  not  even 
known  by  name  and  cannot  be  located  by  the  uniformed  police- 
man, and  their  names  are  certainly  not  bandied  about  by  crooks 
as  common  property." 

31.  "The  honesty  and  good  character  of  an  ordinary  London 
constable,"  says  Mr.  McAdoo,  "is  taken  to  be  as  sure  as  that 
of  the  Prime  Minister." 

32.  Berlin  and  other  German  cities  have  bureaus  of  statis- 
tics which  enable  citizens  to  obtain  an  up-to-date  view  of  local 
affairs. 

33.  The  floating  population  of  all  British  cities — "the  lodg- 
ing-house vote" — is  practically  disfranchised  for  municipal 
purposes  by  the  slight  property  qualifications  required. 

34.  Glasgow  has  made  street-sweeping,  street-sprinkling  and 
garbage  disposal  part  of  its  sanitary  government  and  put  them 
under  one  jurisdiction. 

35.  Paris  has  placed  under  one  department  the  care  of  the 
parks  and  of  the  tree-shaded  streets,  the  lighting  of  thorough- 
fares and  the  erection  and  supervision  of  booths  and  kiosks. 


132  THE  PRICE  OF  INEFFICIENCY 

'' ADVANCED '^    SOCIAL    LAWS;    THE    CARE    OF    PUBLIC    WARDS. 

36.  Berlin  has  drafted  nearly  4,000  citizens  for  poor  relief. 
These  are  divided  into  upward  of  250  local  committees  and 
every  member  is  sponsor  for  specified  families,  with  authority 
to  attend  to  their  wants.  No  compensation  is  given  to  these 
committees.  Refusal  to  serve  may  be  punished  by  tax  increases 
or  the  suspension  of  civil  and  political  privileges. 

37.  Glasgow  has  women  as  domiciliary  visitors,  known  as 
"lady  inspectors,"  who  make  suggestions  as  to  cleanliness  and 
household  reform  to  poor  families. 

38.  After  child-birth  Swiss  cities  require  a  six  weeks'  cessa- 
tion from  work  by  women  wage-earners. 

39.  Cologne  has  official  visitors  of  the  poor,  one  of  whom 
calls  on  every  w^age-earning  woman  who  has  given  birth  to  a 
child.  If  the  mother  needs  to  go  out  to  work,  the  fact  is  re- 
ported and  a  grant  of  money  is  made  on  condition  that  she  stay 
at  home  and  nurse  her  infant. 

40.  The  general  death-rate  of  illegitimate  infants  is  twice 
that  of  legitimate  ones.  Leipsic  constitutes  every  illegitimate 
child  a  ward  of  the  municipality  and  its  condition  is  inspected. 
The  death-rate  of  such  infants  is  now  even  less  than  that  of 
legitimate  ones. 

41.  Paris  has  nearly  a  hundred  classes  de  garde  for  small 
children  whose  parents  are  employed  away  from  home.  The 
children  are  kept  until  their  parents  have  returned  from  work. 

42.  Charlottenburg  has  established  a  hospital  school  in  a 
pine  forest  near  the  city  for  physically  weak  children  under 
medical  treatment.  Tables  and  benches  are  set  out  under  the 
fir  trees  and  meals  are  served  as  well  as  lessons  taught.  'M 
marveled,"  said  Sir  John  Gorst,  "at  the  administrative  ability 
which  had  at  so  small  a  cost  provided  such  a  great  portion  of 
health  and  happiness." 

43.  Glasgow  maintains  municipal  wash-houses  where  for 
four  cents  an  hour  a  woman  may  use  a  stall  with  fixed  tubs  for 
hot  and  cold  water  and  appliances  for  steam  boiling  and  dry- 
ing. 

44.  Paris,  like  many  other  cities,  has  municipal  pawnshops — 
the  Mont  de  Piete — with  three  large  auxiliaries  and  above  a 
score  of  branches.  These  loan  on  an  average  $5  a  year  to  every 
man,  woman  and  child. 


MUNICIPAL  SOCIALISM  133 

RAILWAY   STATIONS    WITH    BEAUTIFUL   SURROUNDINGS. 

45.  Paris  has  a  belt  railroad  following  the  perimeter  of  the 
city.  This  connects  the  various  railroad  stations,  and  both 
freight  and  passenger  traffic  are  facilitated. 

46.  The  railway  stations  in  German  cities  give  upon  plazas 
of  grass  and  flowers  surrounded  by  hotels  and  municipal  build- 
ings so  designed  as  to  produce  a  single  architectural  effect. 

47.  Berlin,  Dresden  and  other  German  cities  study  the 
"winds  and  refuse  to  let  factories  locate  in  outlying  districts 
whence  their  smoke  or  odors  might  be  blown  into  the  city. 

48.  Diisseldorf  has  provided  or  regulated  the  designs  for 
factories,  office  buildings  and  department  stores,  and  these  are 
ornamented  with  statues,  frescoes  and  mosaics. 

49.  Paris  and  Brussels  have  improved  advertising  signs  by 
offering  prizes  for  the  most  artistic. 

50.  Germany  has  developed  a  school  of  commercial  architec- 
ture headed  by  Alfred  Messel.  Wertheim's  department  store 
and  the  Rheingold  restaurant  in  Berlin  and  the  offices  of  the 
Allgemeine  Zeitung  in  Munich  are  accounted  in  as  good  taste 
as  the  best  public  buildings. 

BEAUTIFUL  RIVER  BANKS  WITHIN  EUROPEAN   CITIES. 

51.  Instead  of  using  their  rivers  to  carry  off  sewage,  instead 
of  permitting  unsightly  commercial  structures  to  occupy  their 
shores,  European  cities  have  treated  the  rivers  as  assets  of 
beauty  and  enjoyment.  London  has  the  Victoria  Embankment 
upon  the  Thames — a  downtown  riverside  park.  Paris  has 
lined  the  Seine  •udth  stone  quays  and  faced  it  wdth  public  build- 
ings and  palaces.  Cologne  has  occupied  nearly  all  the  Rhine 
river-front  with  stone  embankments  and  tree-bordered  avenues. 
Budapest  has  its  river-front  streets  higher  than  the  quays  of 
the  Danube  and  these  are  lined  with  fine  public  and  private 
buildings.  In  the  Briihl  Terrace  overlooking  the  Elbe,  Dres- 
den has  "the  Balcony  of  Europe."  Berlin  has  built  stone 
quays  along  the  Spree  and  planted  the  banks  with  trees.  It 
has  made  stone  and  cement  walls  for  its  canals. 

52.  The  maritime  cities  of  Europe  insist  that  commerce  shall 
make  terms  with  beauty  on  their  harbor-fronts.  Hamburg  and 
Bremen  have  handsome  warehouses  in  a  modified  mediaeval 
style  The  water-front  of  Antwerp  and  Stockholm  is  walled 
with  cement  and  stone.     The  quays  of   Havre  are  recreation 


134  THE  PRICE  OF  INEFFICIENCY 

centers  and  the  buildings  must  conform  to  a  general  architec- 
tural plan. 

53.  Hamburg  gets  its  drinking-water  from  the  Elbe.  In 
1893,  following  the  cholera  outbreak  of  1892,  it  installed  the 
greatest  filtration  plant  in  the  world,  a  system  of  subsidence 
basins  and  filters.  Water  which  before  entering  these  basins 
contained  millions  of  cholera  germs  to  the  cubic  inch  emerged 
as  clear  as  a  mountain  stream. 

54.  Stockholm,  Paris,  Liege  and  Budapest  have  bridges  with 
architecturally  imposing  plaza  approaches. 

55.  Dresden,  Vienna  and  Amsterdam  have  introduced  sculp- 
ture into  their  bridges  with  a  monumental  effect. 

56.  Instead  of  making  its  show  island  an  asylum  for  paupers 
and  criminals,  Paris  has  on  the  He  de  la  Cite  its  stateliest  ca- 
thedral, its  central  Courts  of  Justice,  a  great  hospital,  the  Tri- 
bunal of  Commerce,  the  Prefecture  of  Police,  &c. 

GROUPED    BUILDINGS;    NEW    STREETS;    VINES    AND    FLOWERS;    THE 

CITY    BEAUTIFUL. 

57.  European  cities  are  discarding  the  checker-board  street 
plan.  Paris  led  the  way  in  Napoleon  III.'s  time  when  Baron 
Haussmann,  Prefect  of  the  Seine,  built  great  boulevards  and 
avenues  by  the  hundred,  laid  out  diagonal  avenues  between 
important  points  and  constructed  engirdling  boulevards.  The 
sum  of  $240,000,000  was  spent  in  this  work,  and  last  year  it 
was  decided  to  devote  $175,000,000  more  thereto. 

58.  London  has  done  a  similar  but  smaller  work  in  King's- 
Way.  The  German  cities  are  following  neither  the  checker- 
board nor  the  radial  avenue,  ring-boulevard  plan.  Their  new 
streets  wind  perceptibly  so  as  to  open  fresh  vistas  and  permit 
of  collateral  effects  of  parking  and  statuary. 

59.  Instead  of  locating  their  public  buildings  at  random,  the 
capitals  of  Europe  arrange  them  with  relation  to  each  other 
and  to  some  park,  open  space  or  boulevard,  so  that  they  eon- 
tribute  to  one  central  effect.  The  finest  is  the  Ring-strasse  of 
Vienna,  and  other  notable  examples  are  Berlin's  Unter  den 
Linden  and  Lustgarten,  Moscow's  Kremlin,  Dresden's  Zwinger, 
the  Louvre  region  of  Paris  and  the  Grande  Place  of  Brussels. 

60.  In  Dresden  citizens  have  undertaken  to  induce  every 
landlord  and  tenant  to  decorate  yards,  buildings  and  casements 
with  plants,  vines,  shrubs  and  window-boxes.  The  authorities 
have  co-operated  by  decorating  municipal  buildings,  and  at  a 


IMUNICIPAL  SOCIALISM  135 

small  expenditure    the   summer   aspect    of   the    city    has    been 
transformed. 

61.  The  color  sense  has  been  indulged  in  all  Russian  cities. 
Building  exteriors  are  of  plaster  to  protect  the  brick  from  the 
frost,  and  every  year  these  are  repaired  and  repainted,  and 
red,  blue,  buff,  green,  white  and  gilt  diversified  with  mosaics 
are  successfully  employed. 

62.  Every  important  European  city  has  regulations  restrict- 
ing the  height  of  buildings,  the  width  of  balconies,  the  projec- 
tion of  cornices,  the  size  of  windows,  and  the  character  of 
lamps,  signs,  awnings,  fences  and  doorways. 

SCHOOLS    OF    TOW^N-PLANNING ;    SAVING    BEAUTIFUL    FEATURES. 

63.  Ancient  Athens  and  Rome  set  us  an  example  of  civic 
centers  in  the  Acropolis  and  the  Forum. 

64.  Frankfort  purchased  a  number  of  medieval  buildings 
near  the  City  Hall  and  restored  them  to  the  original  style,  that 
they  should  be  in  harmony  with  it. 

65.  Berlin  has  a  school  of  town-planning. 

66.  Germany  has  experts  like  Stubben,  Fischer,  Gurlett, 
Henrici  and  Baumeister,  who  give  advice  on  townrplanning 
and  travel  from  city  to  city.  It  is  a  new  profession — "Stadte- 
bau." 

67.  Frankfort  has  built  an  exposition  hall  about  the  size  of 
Madison  Square  Garden. 

68.  Munich  has  a  group  of  exposition  buildings  comprising 
an  auditorium,  a  theater,  a  hall  for  exhibits  and  a  summer 
concert  garden. 

69.  When  a  new  street  is  opened  in  Brussels  or  Paris  prizes 
running  as  high  as  $4,000  in  Brussels  and  equal  to  one-half  the 
street  tax  in  Paris  are  offered  by  the  authorities  for  the  most 
artistic  facades. 

70.  Vienna  remits  a  percentage  of  taxes  to  landlords  who 
will  tear  down  an  old  building  and  put  up  a  bigger  and  better 
one. 

71.  Copenhagen  gives  a  prize  every  year  to  the  architect  who 
designs  the  most  sightly  building  and  best  harmonizes  it  with 
older  buildings  about  it. 

72.  Paris  requires  that  all  office  and  house  fronts  shall  be 
periodically  repaired  or  repainted,  so  that  the  street  shall  ap- 
pear neat  and  fresh. 

73.  All  wide  Paris  streets  are  in  effect  parks.     They  have 


136  THE  PRICE  OF  INEFFICIENCY 

rows  of  shade  trees.  Many  of  them  have  a  central  park  strip 
planted  with  trees,  grass  and  flowers,  and  benches  are  placed 
here.  Along  chief  streets  are  perhaps  100,000  trees,  a  large 
number  for  a  city  so  compactly  built. 

7-1.  In  practically  all  European  cities  pavements  are  kept 
constantly  in  good  repair. 

75.  All  those  European  cities  whose  good  government  has 
something  to  teach  America  are  managed  not  by  politicians  but 
by  experts. 

The  civic  pride  of  the  citizens  of  American  cities,  so  long 
practically  non-existent,  is  now  growing  and  the  spirit  of  the 
movement  is  finding  its  greatest  expression  in  the  re-planning  of 
cities. 

During  the  last  two  decades,  and  principally  within  the  last 
few  years,  some  seventy-five  cities  have  taken  up  the  subject 
and  have  prepared  more  or  less  elaborate  plans,  while  in  nu- 
merous other  cities  the  movement  is  taking  form. 

This  means  a  greatly  increased  activity  in  building  construc- 
tion and  the  creation  of  a  demand  for  a  better  class  of  build- 
ings both  architecturally  and  otherwise.  It  means  a  large 
amount  also  of  alterations  and  remodeling,  and  it  is  from 
every  point  of  view  of  the  greatest  importance  to  the  public  in 
general. 

To  be  familiar  with  city  planning  is  a  duty  which  the  city 
authorities,  architects  and  engineers  owe  not  only  to  them- 
selves, but  to  the  public,  for  even  if  they  are  not  directly  inter- 
ested in  the  projects  which  may  be  put  forward,  the  community 
looks  to  them  for  guidance  in  forming  its  opinions  on  the  sub- 
ject. 

In  many  of  the  cities  which  have  undertaken  city  planning, 
the  plans  evolved  have  been  of  the  most  elaborate  and  extensive 
character,  and  the  draughtsmanship  with  which  they  have  been 
prepared  has  made  them  beautiful  objects  of  art.  Unfortu- 
nately, however,  in  many  cases,  that  is  all  they  are,  and  their 
adoption  in  practice  would  be  little  short  of  a  disaster  to  the  city. 
They  are  attractive  but  impracticable,  and  dangerous  in  the  ex- 
treme, not  only  to  the  cities  which  are  tempted  to  adopt  them, 
but  to  the  whole  city  planning  movement,  since  important  fail- 
ures are  certain  to  react  upon  and  tend  to  discourage  other  cities 
in  their  plans. 

A  city,  considered   in  its  essentials,  is  an  apparatus  of  an 


MUNICIPAL  SOCIALISM  137 

operative  character  and  a  means  of  operation  for  those  who 
make  use  of  its  facilities.  It  is,  in  short,  a  depot  and  a  dis- 
tributing apparatus,  and  its  principal  functions  are  the  hous- 
ing of  the  public  and  the  possessions  of  the  public,  their  pro- 
tection and  distribution.  The  city  is  thus  not  only  the  static 
mechanism  of  buildings  but  the  dynamic  mechanism  of  a  dis- 
tributing machine,  and  it  is  therefore  necessary  to  consider  it, 
not  only  from  the  architectural  point  of  view,  but  from  the 
engineering  point  of  view  as  well. 

City  planning,  consequently,  in  which  full  consideration  is 
not  given  to  the  engineering  side,  but  in  which  only  the  archi- 
tectural features  are  developed,  are  likely  to  be  of  doubtful 
value,  if  not  worse  than  valueless,  for  if  put  into  effect,  new 
and  unexpected  difficulties  would  be  encountered,  which  would 
more  than  overbalance  their  desirable  features. 

It  is  therefore  of  the  first  importance  for  those  having  a  city 
planning  project  under  way,  to  retain  an  experienced  engineer, 
as  only  in  this  way  can  safe  and  thoroughly  practicable  results  be 
obtained. 

And  the  engineer  selected  must  be  a  civic  engineer,  not 
merely  an  engineer  with  the  customary  training,  but  one  who 
has  the  special  training  and  experience  necessary  to  consider 
all  the  varied  features  of  the  city  as  an  operative  mechanism 
and  to  take  advantage  of  the  most  recent  and  advanced  foreign 
practice. 

The  great  part  played  by  engineering  in  city  planning  is  not 
fully  appreciated,  except  by  those  who  have  had  direct  experience 
in  such  undertakings.  Among  the  primary  engineering  features 
of  city  planning  are  water  works,  transportation  systems,  water- 
ways and  harbors,  highway  engineering,  street  lighting,  sewage 
and  refuse  disposal,  gas  and  electric  supply,  police  and  fire  alarm 
systems,  etc. 

The  laying  out  of  the  streets,  squares  and  parks,  and  their  em- 
bellishment by  architectural  or  landscape  treatment,  though  im- 
portant, are  only  the  beginning  of  city  planning.  The  installa- 
tion of  the  necessary  utilities  and  their  efficient  operation  and 
maintenance  are  of  fundamental  importance. 

In  the  planning  of  a  city,  the  architect  and  engineer  should 
not  plan  or  replan  separate  portions  of  it,  but  should  plan  it 
as  a  whole,  with  respect  to  the  immediate  requirements  and  to 
the  requirements  of  the  future  as  well,  and  the  most  careful 


138  THE  PRICE  OF  INEFFICIENCY 

attention  should  be  paid  to  the  probable  direction  of  its  growth, 
the  presence  of  natural  obstacles  and  of  natural  incentives  to 
growth. 

City  planning  is  not  only  a  question  of  architecture  and 
engineering  for  it  goes  more  deeply  into  the  lives  of  the  citi- 
zens, affecting  them  in  numerous  ways  with  a  degree  of  im- 
portance that  can  only  be  realized  by  those  who  have  made  a 
study  of  the  subject. 

The  effect,  on  its  citizens,  of  the  building  of  a  city  in  accord- 
ance with  the  highest  principles  of  the  art  of  city  planning 
will  be  one  of  a  remarkable  betterment  in  their  social,  ethical 
and  physical  condition.  The  superior  appearance,  beauty  and 
harmony  of  the  city  will  develop  artistic  taste  and  will  result 
in  increased  civic  pride  and  patriotism.  This  in  turn  affects 
the  character  of  the  individual  favorably,  improving  moral  con- 
ditions. The  better  hygienic  system  of  the  well  planned  city 
provides  more  light,  purer  air  and  more  healthful  and  less  ex- 
pensive living  quarters,  affecting  the  whole  lives  of  the  citizens 
favorably. 

The  improved  plan  of  the  city,  by  providing  safer  and  more 
direct  means  of  transportation,  prevents  accidents  and  saves 
enormous  amounts  of  time.  The  conveniently  located  parks, 
recreation  places,  public  baths,  gymnasiums  and  play  grounds 
with  ready  access  to  woodlands  and  athletic  fields,  provides  in- 
creased opportunity  for  physical  development.  The  proper 
location  of  municipal  markets  affords  cheap  and  wholesome 
supplies  of  food.  These  factors,  with  convenient  location  of 
schools,  libraries,  churches  and  other  structures  of  a  public 
nature,  all  unite  to  place  the  life  of  the  citizen  on  a  higher 
plane.  A  greater  sense  of  responsibility  is  instilled  while  the 
comfort  and  enjoyment  of  the  individual  is  added  to,  and  an 
increase  of  population  of  a  higher  character  effected. 

The  extent  to  which  this  improvement  goes  is  far  more  than 
is  realized  by  the  average  observer.  In  Germany,  where  city 
planning  has  reached  its  highest  development,  the  results  are 
most  remarkable.  This  is  shown  by  a  comparison  of  six  cities  in 
Germany,  selected  at  random,  with  six  cities  in  the  United  States, 
which  had  in  1880  approximately  the  same  population. 

Cincinnati  has  grown  16.1%,  27.7%  and  42.8%  respectively 
in  three  decades,  while  Breslau's  growth  has  been  22.8%, 
54.9%  and  87%  during  the  same  time.  In  the  thirty  years 
Buffalo  has  increased  173.4%   and  Cologne  254.6%;  New  Or- 


MUNICIPAL  SOCIALISM  139 

leans,  56.9%  and  Dresden  147.1% ;  Louisville  80.9%,  and  Han- 
over 146.2%  ;  Providence  113.97c  and  Nuremberg  234.1%  and 
Kochester  144.1%  and  Chemnitz  237.1%. 

The  German  cities  have  increased  almost  twice  as  rapidly  as 
the  American  cities,  and  while  all  this  increase  is  not  due  to 
city  planning,  a  very  considerable  portion  of  it  can  be  so  as- 
cribed. 

The  arrangement  of  traffic,  canalization,  location  of  factories, 
the  easy  movement  of  products,  the  well  nourished  condition 
and  the  ambition  of  employees  furnish  a  powerful  impetus  to 
industry.  City  planning  justifies  itself  at  every  point,  and 
America  is  walking  up  to  it  in  a  wonderful  way. 

"Wliile  the  movement  in  its  present  recrudescence  is  recent, 
the  art  of  city  planning  is  one  of  the  greatest  antiquity.  The 
remains  of  the  earliest  communal  abodes  of  man,  of  however 
primitive  a  nature,  show  a  certain  definite  arrangement.  With 
the  development  of  races,  villages  became  towns  and  towns  be- 
came cities  continually  on  a  larger  scale,  and  it  is  undoubtedly 
true  that  the  higher  the  degree  of  civilization  of  a  people,  the 
greater  will  be  the  size  of  its  cities.  The  civilization  of  the 
Romans  was  largely  expressed  in  the  city  of  Rome,  and  the 
glories  of  ancient  peoples  generally  shown  in  their  cities. 

In  the  art  of  city  planning,  genius  has  occasionally  arisen; 
among  the  early  masters  being  Merian  and  Canaletto,  the  for- 
mer developing  the  general  plan  of  the  city  and  the  latter 
excelling  in  its  interior  arrangements.  Sir  Christopher  Wren 
in  1666  after  the  great  fire  of  London,  had  the  genius  to  re- 
construct the  city  on  a  plan  that  would  have  made  it  one  of 
the  most  beautiful  in  the  world,  but  he  was  ahead  of  his  time 
and  London  was  permitted  to  grow  up  into  the  disordered 
mass  of  streets  and  lanes  that  make  it  the  greatest  spot  of  con- 
fusion to-day  on  the  face  of  the  globe. 

L 'Enfant,  however,  who  planned  the  city  of  Washington, 
admittedly  the  most  beautiful  city  in  America  and  one  of  the 
most  beautiful  in  the  world,  enjoyed  the  double  good  fortune 
of  having  the  support  of  the  founders  of  the  republic  and  an  un- 
encumbered site  upon  which  to  build,  while  most  city  planners 
have  had  to  reorganize  existing  cities. 

Equally  fortunate  was  Baron  Haussmann  who  rebuilt  Paris. 
He  w^as  given  a  free  hand  and  a  plan  was  developed,  in  which 
conceptions  of  order,  convenience,  variety  and  grandeur  were 


140  THE  PRICE  OF  INEFFICIENCY 

not  allowed  to  be  interfered  with  by  any  question  of  expense. 
Great  avenues  were  cut  through  labyrinths  of  streets  and  foul 
and  congested  districts  were  replaced  with  parks  and  spacious 
squares.  Hundreds  of  millions  were  spent  and  Paris  is  still 
spending  gladly  and  with  a  lavish  hand  for  extensions  of  his 
plan. 

The  early  masters,  however,  did  not  impart  their  theory, 
leaving  only  their  accomplished  work  as  examples.  Modern  or 
practical  city  planning,  therefore,  is  a  new  art,  based  upon 
principles,  theories  and  practice  only  recently  placed  on  a 
scientific  basis.  The  modern  masters  are  Reinhard  Baumeister, 
the  originator  of  the  science  of  city  planning,  and  Camillo  Sitte, 
the  definer  of  aesthetic  principles,  while  Joseph  Stiibben  is  the 
greatest  of  practical  city  builders.  Their  work  is  available  in 
theory,  design  and  practice  and  will  serve  for  future  emulation 
as  it  has  served  modern  Germany  so  well  as  the  basis  of  her 
wonderful  cities. 

In  the  scope  of  practical  city  planning  are  included  the 
broadest  principles  and  the  fullest  details.  The  leading  ele- 
ments are  the  plan  of  the  city  as  a  whole,  the  segregation  in 
suitable  districts  of  the  different  classes  of  the  population,  and 
their  proper  housing  in  classes  of  structures  suited  to  their  re- 
quirements, the  arrangement  of  such  classes  of  structures  in 
groups  and  district  units  and  the  placing  of  such  groups  and 
units  in  proper  relation  to  the  whole;  the  development  of  other 
classes  of  units,  such  as  civic  centers,  parks,  public  squares, 
grounds,  athletic  and  recreation  fields  and  cemeteries  and  their 
location  with  reference  to  their  uses  and  nature;  the  supplying 
of  the  units  with  the  facilities  and  the  public  structures  neces- 
sary for  the  business  to  be  transacted  in  them;  the  location  in 
civic  centers  of  buildings  suited  thereto,  both  as  to  the  uses  and 
their  architectural  qualities;  the  arrangement  of  systems  of 
transportation,  the  laying  out  of  streams  of  traffic,  location  of 
railway  stations  and  bridges  and  harbor  facilities;  the  system- 
atic location  of  schools,  libraries,  churches,  hospitals,  insti- 
tutions, theaters  and  other  semi-public  structures;  the  general 
hygienic  design  of  buildings  and  the  system  of  city  sanitation 
and  waste  disposal;  the  laying  out  of  adjoining  lands,  woods 
and  fields  for  purposes  of  recreation,  the  artistic  regulation 
of  structures  and  street  plans  and  the  laying  out  of  surround- 
ing ten-itory,  all  in  accordance  with  a  settled  plan,  adapted  to 
fufiU  in  the  best  possible  way  the  purposes  intended  and  to 


MUNICIPAL  SOCIALISM  141 

take  care  of  the  growth  of  the  city  and  prevent  its  abnormal 
development. 

The  planning  of  a  city,  like  the  planning  of  anything  else, 
should  be  carried  out  with  a  view  to  the  use  which  is  to  be  made 
of  it,  and  to  best  adapt  it  to  that  use,  and  in  addition  to  make  it 
as  pleasing  from  an  artistic  point  of  view  as  possible.  There 
should  first  be  strength  in  the  design  and  if  strength  be  eco- 
nomically manifested,  the  artistic  enrichment  of  the  design  will 
be  easily  effected. 

In  city  building,  the  strength  of  its  design  may  be  indicated 
by  its  plan.  Its  streets  and  avenues  should  be  broadly  and 
firmly  laid  out,  advantage  taken  of  its  natural  site  and  a  sense 
of  unity  caused  to  pervade  the  whole  as  a  result  of  its  unity  in 
structure.  Its  design  should  not  be  crowded,  or  its  streets 
narrow  and  at  haphazard,  nor  should  they  be  throughout  of 
such  absolute  uniformity  as  to  destroy  their  individuality  and 
make  the  city  merely  a  monotonous  aggregation  of  streets,  as 
is  so  often  the  case  in  American  cities. 

A  city  should  be  planned  and  built  with  a  breadth  of  view 
and  boldness  of  execution;  it  should  be  built  more  for  the 
future  than  for  the  present  and  its  design  should  halt  at  no 
necessary  elaboration  nor  consider  expense. 

What  the  city  is  for  should  always  be  considered  and  the 
most  economical  and  efi'ective  methods  of  reaching  its  aims 
should  be  adopted,  yet  the  fact  that  it  is  not  merely  utilitarian 
should  not  be  lost  sight  of.  A  city  should  not  only  be  a  place 
of  residence  but  an  inspiration  to  its  inhabitants  and  a  worthy 
object  of  their  civic  pride. 


CHAPTER  XI 
COMMISSION  GOVERNMENT 

Does  popular  government  mean  misgovernment? — A  momentous  revolution 
in  municipal  government — Its  origin  in  a  catastrophe — Its  rapid 
spread — How  the  commission  form  of  city  government  eliminates  local 
politics — The  death  blow  of  graft — Automatic  good  government — • 
Earlier  examples  of  commission  government — Washington  a  notable 
example — The  autocracy  of  the  whole — How  concentration  of  responsi- 
bility produces  efficient  government — Actual  workings  of  the  commis- 
sion plan — Similarity  to  continental  systems  of  national  administra- 
tion— Efficacy  of  the  political  inventions  of  the  initiative,  referendum 
and  recall — The  direct  primary — The  passing  of  the  boss — The  efficient 
Interstate  Commerce  Commission  and  the  inefficient  post  office — 'The 
absurdities  of  state  legislatures — Irresponsibility  of  legislators — The 
remedy — Official  usurpation  under  the  American  constitution — Per- 
nicious and  sensational  activity  of  law  officers — The  law  a  tissue  of 
loopholes — The  constitution  unable  to  cope  with  modern  conditions — • 
How  it  strangles  the  will  of  the  people — Superior  flexibility  of  European 
governments — Neutral  types  of  our  presidents — How  minorities  rule — 
The  thick  skinned  office  holder — Misrepresentative  government — 
Congressional  abuses — A  drastic  remedy — Who  really  rules  the  United 
States — How  to  do  without  a  president  and  a  congress. 

Popular  government  has  long  labored  under  the  criticism 
that  the  interest  of  the  citizen  in  how  he  is  governed  is  so  slight 
that  popular  government  means  misgovernment.  American 
cities  have  been  particularly  pointed  out  as  examples  of  the 
failure  of  popular  government,  where,  touching  the  citizen 
most  intimately,  it  should  be  most  successful. 

A  new  order,  however,  is  coming  in.  Municipal  government 
is  becoming  a  different  thing,  and  the  old  reproach  is  being 
wiped  out  with  a  celerity  that  is  astonishing.  The  average 
citizen  is  showing  an  interest  in  the  way  he  is  governed  that 
amounts  to  a  passion  and  the  lengths  to  which  the  new  form 
of  government  will  be  carried  and  the  great  services  which  it  is 
rendering  and  will  continue  to  render  to  the  public,  are  diffi- 
cult to  appreciate. 

It  amounts,  indeed,  to  a  revolution,  and  is  a  striking  illus- 
tration of  the  rapidity  with  which  a  desirable  innovation,  even 

142 


COMMISSION  GOYERNIMENT  143 

in  fundamental  affairs,  can  be  adopted,  when  it  proves  itself 
of  real  value. 

This  new  form  of  government  is  known  as  the  "commission 
plan"  and  in  less  than  six  years  from  its  inception,  has  spread 
to  over  a  hundred  and  thirty  American  cities,  meeting  with  the 
greatest  success.  In  twenty  states  it  is  optional  with  cities 
whether  they  adopt  the  plan  or  not,  and  at  the  rate  of  progress 
made  and  the  satisfaction  resulting  from  its  adoption,  it  is 
safe  to  say  that  tlie  commission  form  of  government  will  be- 
come the  exclusive  method  of  city  administration  within  a  gen- 
eration. 

It  is  an  illustration,  also,  of  the  vast  difference  between  a  good 
system,  which  automatically  works  out  desirable  results,  and  a 
poor  system  in  which  there  are  no  incentives  to  efficiency  and 
no  checks  on  inefficiency. 

The  commission  form  of  government  had  its  origin  in  a 
catastrophe.  It  was  an  expedient,  adopted  in  a  great  emer- 
gency, and  produced,  like  so  many  inventions,  by  necessity. 
The  Galveston  flood  left  that  city  in  a  state  of  ruin,  and  the 
ordinary  forms  of  government  were  inadequate.  Martial  law 
was  declared  and  the  necessity  of  the  city  continued  so  great 
that  at  the  request  of  citizens  the  governor  appointed  a  com- 
mission of  five  men  to  conduct  the  affairs  of  the  city.  Their 
powers  were  practically  autocratic,  and  they  were  selected  be- 
cause of  their  reputation  and  abilities. 

It  was  time  when  necessity  could  not  wait  on  politics,  but 
unrealized,  the  doom  of  the  local  politician  was  then  and  there 
sounded,  for  when  the  time  came  for  the  commissioners  to  re- 
tire, they  were  reelected  and  that  form  of  government  became 
established  permanently. 

Its  results  were  so  good  that  neighboring  cities,  jealous  of 
Galveston's  splendid  showing,  also  adopted  the  plan,  and  a 
distant  city,  Des  Moines,  Iowa,  added  desirable  features  and 
gave  such  publicity  to  the  plan  and  identified  the  city  so  much 
with  it,  that  it  is  often  called  the  Des  Moines  plan  and  is  largely 
supposed  to  have  originated  in  that  city. 

In  reality  the  plan  of  government  by  a  small  board  with 
great  powers,  is  one  of  the  oldest  and  most  effective  of  all 
forms  of  government.  Nothing  new  has  been  added  to  the 
store  of  political  wisdom  by  the  device,  but  the  applicability 
and  practicability  of  such  a  form  of  government  to  the  Ameri- 
can city  had  been  previously  overlooked. 


144  THE  PRICE  OF  INEFFICIENCY 

The  commission  form  of  government,  in  its  most  primitive 
form,  is  in  evidence  among  miners  as  a  miners'  meeting,  in 
which,  being  far  removed  from  all  laws,  the  miners  resort  to 
law  of  their  own,  which  has  all  the  effect  and  vastly  more  effi- 
ciency than  ordinary  law.  Another  example  is  seen  in  the  vig- 
ilance committee  of  the  frontier  cities,  which  was  practically 
what  the  Galveston  commission  amounted  to.  Emergency 
methods,  the  effective  stroke  which  manifests  itself  in  times  of 
necessity,  applied  to  ordinary  affairs  is  what  it  resolves  itself 
into. 

Japan  is  practically  ruled  by  a  commission  form  of  govern- 
ment, the  council  of  Elder  Statesmen  forming  the  principal  form 
of  government.  The  ancient  Greek  and  Roman  cities  at  times 
were  governed  in  much  the  same  manner. 

The  city  of  Washington,  long  one  of  the  best  ruled  cities,  is  a 
city  government  under  a  commission,  in  this  case  appointed  by 
Congress.  The  city  of  New  York,  without  realizing  it,  is  be- 
ing largely  governed  on  the  commission  plan,  the  powers  of 
the  aldermen  having  been  taken  away,  and  the  principal  source 
of  authority  being  in  the  Board  of  Estimate.  Though  lacking 
detail,  the  present  New  York  plan  is  much  better  than  the  old 
system. 

The  originality  of  the  present  movement  of  commission  gov- 
ernment lies  in  the  fact  that  the  commission  is  elected  by  the 
people  instead  of  being  appointed  by  some  other  source 
of  authority.  It  is  in  fact  an  elective  bureaucracy,  and  is 
achieving  the  admirable  results  of  the  bureaucracy  of  Ger- 
many. 

The  rule  of  an  autocrat,  were  the  autocrat  a  perfect  being, 
would  be  the  most  desirable  form  of  government.  In  a  de- 
mocracy, the  rule  is,  so  far  as  the  individual  is  concerned,  an 
autocracy  of  all  of  his  fellow  citizens  exercised  through  a  sys- 
tem of  officials.  The  citizen  of  a  democracy,  however,  has,  in 
feeling  that  he  is  a  part  of  the  autocracy  ruling  others  of  his 
fellow  citizens,  a  saving  grace  as  compared  with  the  subject  of 
a  monarch,  who  is  ruled  by  a  power  entirely  outside  of  him- 
self. 

A  democracy,  being  essentially  an  autocracy  of  the  whole, 
should  achieve  its  best  results  when  the  system  of  government 
is  as  nearly  possible  autocratic  in  operation,  though  demo- 
cratic in  selection  of  the  ruling  officials.  The  commission  form 
of  government  most  nearly  approaches  such  a  condition,  and 


CO^BIISSION  GOVERNMENT  145 

its  great  success  as  compared  with  the  previous  method  is  the 
marvel  of  politics  to-day. 

While  the  plan  of  a  mayor  and  numerous  elected  officials  is 
also  a  form  of  autocracy,  it  is  one  that  has  many  broad  avenues 
of  imperfection,  the  principal  of  which  is  scattering  of  power 
and  division  of  responsibility.  It  is  a  form  of  government, 
too,  in  which  the  control  of  the  public  over  the  officials  is  so 
vague  and  uncertain  as  to  amount  to  no  control  whatever. 

The  number  of  officials  elected  is  so  great  that  the  voters  are 
unable  to  remember  their  names,  much  less  to  have  any  definite 
idea  as  to  their  fitness.  After  selection,  the  division  of  author- 
ity is  so  complicated  that  public  business  when  it  is  transacted 
is  accompanied  with  red  tape  and  graft  to  an  interminable  de- 
gree. 

The  great  number  of  officials,  as  for  example,  a  large  board 
of  aldermen,  causes  each  one  to  have  but  a  small  sense  of  re- 
sponsibility. The  vote  of  one  alderman  in  a  board  of  forty, 
however  much  against  the  public  interest  it  may  prove,  is 
given  with  little  compunction,  as  the  grafting  alderman,  being 
surrounded  by  so  many  others,  has  little  fear  of  being  singled 
out  for  attack,  and  the  voters  have  no  effective  means  of  rebuk- 
ing his  action.  By  the  time  election  comes  around  again,  they 
have  forgotten  just  who  voted  wrong,  and  as  he  may  have 
voted  right  on  other  propositions,  the  whole  question  becomes 
so  mixed  that  the  protest  is  lost  sight  of,  so  many  factors  enter 
into  the  election,  that  the  wrath  of  the  voters  seldom  reaches  its 
proper  object. 

But  with  the  commission  form  of  government,  the  reduction 
in  the  number  of  candidates  to  five,  enables  the  voters  to  find 
out  who  they  are  and  to  remember  what  they  have  found  out, 
before  election,  and  to  exercise  a  control  over  the  commissioners 
after  election. 

This  is  effected  by  the  scrutiny  to  which  their  acts  may  be 
subjected,  the  meetings  of  the  board  being  held  in  public  dur- 
ing the  day,  instead  of  behind  closed  doors  at  night,  and  who- 
ever cares  may  be  present.  The  newspapers  report  the  meet- 
ings and  the  conspicuous  position  of  the  commissioners  and 
the  certainty  of  censure  and  effective  censure  is  such  that, 
even  when  the  members  are  professional  politicians,  as  fre- 
quently happens,  they  are  compelled  to  pursue  the  proper 
course. 


146  THE  PRICE  OF  INEFFICIENCY 

upon  the  members  the  whole  force  of  public  opinion  and  mak- 
ing it  certain  that  the  responsibility  for  an  act  against  the 
public  interest  will  quickly  be  placed. 

The  citizen  has  thus  a  target  for  criticism,  and  when  there  are 
any  complaints  to  be  made,  he  knows  to  whom  to  make  them 
and  who  will  be  held  responsible  if  conditions  are  not  improved. 

Each  of  the  five  commissionerships  carries  sufificient  power 
to  make  the  candidate  important  to  the  voter.  He  informs 
himself  about  the  candidate  and  casts  his  vote  with  intelligence. 
His  vote  becomes  like  a  bullet,  he  can  hit  something  with  it,  in- 
stead of  as  before,  merely  shooting  in  a  general  direction. 

The  commissioners  in  their  meetings  being,  so  to  speak,  in 
the  spot  light,  are  not  without  a  certain  self-consciousness. 
They  are  often  playing  a  role,  that  of  a  public  official  perform- 
ing his  duty  properly,  and  while  the  part  rests  uneasily  on  the 
shoulders  of  many  who  get  into  the  commissionerships,  it  is 
the  only  role  possible  under  the  strenuous  circumstances  in 
which  they  are  placed,  for  the  meetings  of  small  boards  of 
highly  responsible  officials  are  usually  accompanied  by  acerbity, 
not  to  say  dissension.  The  characters  of  the  five  men,  their 
inclinations,  ambitions  and  prejudices  are  magnified  as  if  by 
magic  and  the  public  gain  a  real  view  of  their  officials  and 
know  who  the  responsible  men  are  that  make  or  mar  the  city's 
progress. 

The  method  of  selecting  the  commissioners  is  such  that  poli- 
tics is  entirely  eliminated.  There  are  consequently  no  obliga- 
tions of  patronage  to  be  met  and  the  city's  business  is  attended 
to  by  minor  officials  selected  for  their  fitness,  a  great  advan- 
tage at  the  outset. 

The  five  commissioners  are  usually  those  of  public  affairs, 
corresponding  to  the  mayor;  finance;  public  safety;  streets  and 
public  improvements;  and  parks  and  public  property. 

One  of  the  main  objects  of  this  form  of  government  is  the 
treatment  of  the  city  as  a  whole,  its  improvement  and  develop- 
ment as  a  unit,  rather  than  improvements  in  certain  sections, 
due  to  the  influence  of  the  alderman  of  that  section,  as  in  the 
old  order. 

The  cardinal  principles  of  the  commission  system  are  the 
centering  of  responsibility  without  too  great  centering  of 
power;  the  control  of  the  public  over  the  acts  of  its  servants, 
and  the  unification  of  all  the  powers  of  the  city,  both  legisla- 
tive and  executive  in  a  single  small  board. 


COMIVIISSION  G0VER>OIENT  147 

The  details  of  the  organization  of  the  commissions  and  the 
method  of  selection  of  commissionei-s  vary  in  different  cities. 
In  the  Des  Moines  plan,  the  distinguishing  features  are  the 
initiative,  referendum  and  recall,  and  the  non-partisan  pri- 
mary. The  initiative  is  a  provision  whereby  a  petition  being 
signed  by  a  certain  number  of  citizens  and  being  presented  to 
the  board  for  action,  goes  before  the  public  if  the  board  fails 
to  pass  it.  The  referendum  is  similar  in  operation,  that  is 
where  a  certain  number  of  citizens  object  to  an  ordinance,  it 
must  be  rescinded  or  taken  before  the  public  at  a  general  elec- 
tion. The  recall  provides  for  submission  of  the  continuance  in 
office  of  any  commissioner,  to  the  vote  of  the  public  on  the  de- 
mand of  a  certain  number  of  citizens.  It  is  the  referendum 
applied  to  the  commissioners  personally.  Both  the  recall  and 
the  referendum  are  similar  in  principal  to  the  cabinet  form  of 
government  in  European  countries,  in  which  the  cabinets,  los- 
ing votes  of  confidence  in  parliaments,  resign. 

The  non-partisan  primary  is  a  sort  of  eliminating  prelimi- 
nary election.  No  party  emblems  are  allowed  and  the  ten  high- 
est names  become  the  candidates  for  commissionerships  at  the 
subsequent  election.  In  the  city  of  Grand  Junction,  Colo., 
the  primary  is  superseded  by  the  preferential  ballot,  in  which 
the  voter  indicates  his  first,  second  and  third  choice,  thus  saving 
the  expense  of  the  primary  election,  which  is  entirely  dis- 
pensed with. 

It  is  obvious  that  this  method  of  selecting  the  commissioners 
eliminates  the  political  machine  in  local  politics.  A  corpora- 
tion seeking  a  franchise  can  be  of  no  service  to  a  candidate 
save  by  a  house  to  house  canvass  of  the  voters  previous  to  the 
primary,  an  expedient  of  doubtful  value.  The  grip  of  the 
politician  is  broken,  because  the  public  is  too  numerous  to  be 
"delivered"  and  because,  after  election,  the  referendum  and 
recall  can  so  readily  stop  graft,  jobs,  jokers  and  deals. 

Then,  too,  the  candidate,  owing  no  allegiance  to  an  organiza- 
tion seeking  a  franchise,  can  be  of  no  service  to  a  candidate 
and  is  not  obliged  to  make  appointments  at  the  behest  of  a  boss, 
and  added  is  the  fact  that  there  are  no  minor  offices  to  be  filled 
by  election,  which  reduces  the  places  to  be  filled,  and  wdthout 
places  there  is  little  room  for  politics. 

The  effect  of  the  commission  form  of  government  has  been 
uniformly  good.  Indeed  it  is  the  custom  now  for  cities  having 
such  a  form  of  government  to  advertise  that  fact  among  their 


148  THE  PRICE  OF  INEFFICIENCY 

other  advantages  in  attracting  new  population  and  manufactur- 
ers. 

The  following  examples  of  the  improvement  effected  by  the 
commission  form  of  government,  taken  at  random,  show  the 
remarkable  efficiency  of  the  system. 

In  Keokuk,  Iowa,  the  commission  plan  went  into  effect  in  1909. 
At  that  time  the  city  treasury  was  empty  and  there  was  a  float- 
ing debt  of  20%  of  the  annual  revenue  of  the  city.  After  six 
months  commission  government,  the  city  began  operating  on  a 
cash  basis  and  the  bonded  indebtedness  decreased  by  $39,000. 
More  than  double  the  amount  of  street  improvements  made  in 
the  corresponding  six  months  of  the  preceding  year  was  made, 
while  for  less  than  one  half  of  the  results  accomplished  in  the 
street  department  this  year  for  $11,500,  the  city  paid  last  year 
$14,000.  It  had  been  the  custom  to  borrow  from  $25,000  to 
$30,000  to  "carry  the  city  over"  from  the  beginning  of  the 
council  year  to  tax  paying  time  in  August.  On  that  amount  the 
city  would  pay  5%  interest.  This  year  the  commissioners  did 
not  borrow.  Instead  of  paying  interest  they  managed  to  keep 
a  cash  balance  in  the  city  depository  on  which  the  city  realized 
interest. 

In  Kansas  City,  Kansas,  the  commission  plan  went  into  effect 
in  1910.  When  the  new  regime  commenced,  it  was  found  that 
a  deficit  of  $40,000  in  the  annual  expenses  was  imminent.  By 
energy  in  collecting  licenses,  dog  taxes,  taxes  on  street  cars  and 
telephone  poles,  $16,000  more  was  collected  in  the  nine  months 
than  in  the  previous  year.  Cutting  out  superfluous  city  em- 
ployees and  economizing  reduced  the  expenses  sufficiently  to 
enable  the  Commissioner  of  Finance  to  promise  that  the  city 
would  be  free  from  debt  in  the  first  year. 

In  Berkeley,  California,  the  commission  plan  went  into  effect 
in  1909.  Interest  in  public  affairs  has  been  greatly  increased. 
Daytime  meetings  of  the  council  are  well  attended.  Adminis- 
trative matters  are  more  widely  discussed  on  the  street  than  ever 
before.  The  idea  of  the  old  line  political  divisions  which  always 
dominated  the  city,  seems  entirely  to  have  disappeared  in  munic- 
ipal affairs.  The  city  is  overwhelmingly  republican,  but  a 
socialist  mayor  was  elected  in  1911. 

Of  the  results  of  the  commission  form  of  government,  John 
J.  Hamilton  in  his  "Dethronement  of  the  City  Boss,"  says: 

"Every  city  has  its  own  story  of  deficits  wiped  out,  floating 
debt  taken  up,  bonds  retired,  business  methods  introduced,  long 


COMMISSION  GOVERNIMENT  149 

stancTinG:  nuisances  abated,  laws  enforced,  books  better  kept, 
streets  kept  cleaner,  public  works  more  honestly  constructed, 
public  buildinfirs  erected,  additional  parks  and  playgrounds  ac- 
quired, economies  enforced  and  taxes  reduced — one,  all  or 
many.  All  report  a  Revival  of  public  spirit  and  improvement 
in  business  resulting  from  better  civic  conditions. 

"There  is  no  variation  in  the  character  of  the  reports;  every- 
where it  is  the  leaks  stopped,  system  talcing  the  place  of  chaos, 
efficiency  substituted  for  poor  service,  promptness  for  hopeless 
procrastination,  lower  for  higher  tax  levies,  or  better  values 
received  for  the  public  outlays.  That  which  most  commends 
the  plan  is  the  optimism  which  it  brings  back  into  our  munic- 
ipal politics." 

The  success  of  the  commission  form  of  government  for  cities 
stimulates  interest  in  politics  and  proves  that  the  public  can 
attend  to  its  own  affairs  when  it  can  find  a  system  that  will 
enable  it  to  do  so  in  a  practical  manner. 

The  small  board  of  commissioners  has  in  other  fields  also 
proved  its  great  value.  The  Interstate  Commerce  Commission 
of  the  United  States  is  a  highly  effective  body,  which  performs 
its  duties  without  criticism,  and  which  Avields  a  vast  power. 
Yet  it  is  a  body  within  the  law,  and  acts  consistently  in  a  legal 
manner.  It  is  in  contrast  to  the  Post  Office  Department  which 
also  has  vast  powers,  but  of  an  autocratic,  not  to  say  extra- 
legal nature.  Though  it  comes  in  contact  more  intimately  and 
more  frequently  with  the  public  than  any  other  department, 
the  post  office  is  as  far  removed  from  popular  control  as  it 
might  well  be. 

In  it  power  is  centered  and  responsibility  to  the  public  sev- 
eral steps  removed.  There  is  no  method  whereby  the  public 
can  express  its  will  in  reference  to  the  Post  Office  Department, 
or  in  fact  in  reference  to  any  department  of  the  government, 
and  tlie  power  of  the  department  head  is,  for  practical  purposes, 
unlimited.  The  violent  contrast  between  the  waste  and  ineffi- 
ciency of  the  post  office  department,  and  the  results  of  the 
administration  of  cities  under  the  commission  fonn  of  govern- 
ment, suggests  the  advisability  of  a  change  in  the  administra- 
tion of  the  departments  of  the  government. 

In  New  York  and  other  cities,  the  public  service  commissions 
and  commissions  of  other  natures,  possessing  large  powers,  use 
them  in  the  interest  of  the  public.  The  efficiency  of  these 
bodies  is  due  to  the  same  causes  as  the  success  of  the  commis- 


150  THE  PRICE  OF  INEFFICIENCY 

sion  form  of  government;  that  is,  the  small  number  of  com- 
missioners, the  consequently  conspicuous  positions  which  they 
occupy,  and  the  unification  in  them  of  more  than  one  kind  of 
power.  In  the  commission  form  of  city  government,  the  com- 
missioners have  legislative  and  executive  powers.  In  the  In- 
terstate Commerce  and  various  public  service  commissions  the 
powers  are  judicial,  legislative  and  executive,  that  is,  the  com- 
mission hears  evidence,  makes  orders  which  have  the  effect  of 
laws,  and  then  enforces  them. 

From  the  success  of  the  commission  form  of  city  government, 
there  would  appear  to  be  no  good  reason  why  a  state  govern- 
ment could  not  be  conducted  more  successfully  in  the  same 
manner.  At  present  the  system  of  legislatures  and  a  governor, 
while  not  producing  results  as  bad  as  the  ordinary  city  govern- 
ment, is  not  much  removed  from  it.  There  is  the  same  division 
of  responsibility  and  scattering  of  power,  and  legislators,  being 
numerous  and  vastly  inconspicuous,  feel  little  concern  over 
voting  for  improper  measures. 

The  substitution  of  a  state  board  of  five  governors,  instead 
of  one,  with  the  abolition  of  the  legislature,  could  not  work 
much  worse  than  the  present  system,  and  there  is  every  reason 
to  suppose  that  it  would  work  vastly  better.  It  would  cer- 
tainly eliminate  the  freak  and  ill  considered  legislation  now  so 
prevalent. 

In  the  west,  where  conditions  and  traditions  are  less  binding 
than  in  the  east,  the  experiment  is  more  likely  to  be  tried.  It 
should  not  be  a  long  step  for  a  state  already  filled  with  com- 
mission governed  cities,  to  become  a  commission  governed  state. 

In  the  framing  of  the  constitution  of  the  United  States,  the 
three  powers  of  the  government,  the  legislature,  the  executive 
and  the  judicial  are  distinctly  set  apart  and  the  prerogative  of 
each  are  carefully  guarded,  the  assumption  being  that  abuses 
would  arise  were  any  of  these  powers  to  be  exercised  conjointly 
by  one  set  of  officials.  The  framers  of  the  constitution  were 
near  times  of  the  oppression  of  monarchs  and  their  principal 
care  was  to  const nict  a  form  of  government  in  which  official 
encroachment  would  not  destroy  the  liberties  of  the  people. 

Though  they  framed  a  document  which  has  withstood  the 
wrack  of  time  for  a  centurj'^  and  a  third,  it  has  proven  far  from 
a  perfect  system  of  government ;  in  fact,  it  is  a  system  that  is 
cumbersome,  inelastic,  unresponsive,  indirect,  tedious  and  sub- 
ject to  a  great  number  of  abuses.     In  fact,  the  American  has 


COMMISSION  GOVERNMENT  151 

less  real  liberty  than  the  subject  of  a  modern  monarch,  and 
oiSeial  usurpation  in  enlightened  countries  flourishes  nowhere 
as  in  America. 

The  citizen  is  liable  to  arrest  and  seizure  at  the  whim  of 
agents  of  the  government,  and  from  this  he  has  no  practicable 
redress.  Arrests  are  vastly  more  numerous  than  necessary  and 
are  made  in  a  spectacular  fashion,  and  the  whole  energies  of 
the  departments  devoted  to  securing  convictions  to  save  their 
faces. 

The  powers  of  the  government  in  its  inquisition  into  private 
affairs  are  quite  unlimited,  and  a  system  of  espionage  exists  in 
the  post  office  department,  whereby  the  mail  of  any  person  may 
be  opened  at  will,  not  excepting  the  mail  of  the  president  him- 
self. The  powers  of  the  government  are  not  exceeded  by 
those  of  any  constitutional  government. 

In  America  a  man  may  be  imprisoned  for  intending  to  com- 
mit a  crime  (using  the  mails  with  intent  to  defraud),  a  case  so 
extreme  that  other  governments  do  not  extradite  fugitives  for 
this  crime.  In  addition,  various  societies  are  licensed  to  prose- 
cute violators  against  certain  laws,  a  system  as  pernicious  as 
the  informers  of  the  Roman  times. 

The  American  thus  suffers  arrest  and  is  brought  to  trial  with 
its  great  expense,  with  greater  frequency  and  less  justification 
than  in  any  other  civilized  country. 

On  the  other  hand  real  offenders  plead  technicalities  and 
escape  just  punishment  if  they  are  well  supplied  with  means, 
more  readil}^  than  elsewhere,  and  the  processes  of  the  law  are 
so  expensive  and  long  drawn  out,  that  the  citizen  who  appeals 
for  justice  finds  it  a  long,  expensive  process. 

Thus  America  is  largely  a  lawless  country,  with  less  real 
liberty  and  more  flags  per  inhabitant  (as  shown  by  the  statis- 
tics of  flag  manufacturers)   than  any  similar  countiy. 

The  framers  of  the  constitution  took  themselves  with  great 
seriousness.  In  fastening  the  constitution  as  it  is  upon  the 
country,  they  took  great  pains  to  make  its  amendment  exceed- 
ingly difficult.  They  seemed  to  assume  that  liberty  lived  and 
died  with  them,  that  they  were  bequeathing  the  blessings  of 
freedom  to  future  generations,  who  without  their  pains  would 
othenvise  be  unable  to  obtain  it.  Indeed,  they  exercised,  as  is 
the  way  with  statesmen,  an  over  zealous  regard  for  posterity. 

Bismarck  is  credited  with  the  cynical  remark:  "Let  us 
leave  a  few  reforms  for  the  next  generation  to  solve."     Such 


152  THE  PRICE  OF  INEFFICIENCY 

was  not  the  attitude  of  the  framers  of  the  American  constitu- 
tion.    They  were  building  for  all  time,  in  their  own  opinion. 

It  does  not  appear,  either,  that  in  endeavoring  to  provide  the 
republic  with  a  just  constitution  they  took  any  special  pains  to 
do  justice  to  those  from  whom  the  principal  ideas  came.  A  Phil- 
adelphia merchant,  Pelatiah  Webster,  is  credited  with  having 
been  the  chief  source  of  the  ideas  embodied  in  the  constitution,  but 
no  credit  was  accorded  him  by  the  framers  of  the  document. 

That  the  political  wisdom  of  this  merchant,  however, 
based  on  the  writings  of  theorists  and  the  limited  experience  of 
other  republics,  was  not  adequate  to  the  task,  is  shown,  for  ex- 
ample, by  the  process  of  electing  a  president  by  electors,  a  pro- 
cess which  has  no  vitality  whatever,  and  is  followed  only  in 
form  and  not  in  effect.  While  nobody  in  the  United  States 
has  ever  voted  for  a  president,  but  always  for  the  figure  heads 
known  as  electors,  the  electors  have  never  exercised  the  real 
power  that  it  was  intended  to  confer  on  them,  that  of  actually 
selecting  the  president.  Instead,  political  parties  nominate 
candidates  for  president,  and  electors  are  pledged  to  vote  for 
such  persons  prior  to  election.  Only  in  the  case  of  the  death  of 
a  candidate  for  president  after  election  and  before  the  meet- 
ings of  the  electors,  would  they  exercise  the  powers  which  they 
possess  according  to  the  constitution. 

The  intention  to  have  the  vice  president  a  man  second  in 
ability  to  the  president  failed  to  work  itself  out,  the  system 
really  coming  into  force  being  such  that  only  men  of  inferior 
ability  will  accept  a  vice  presidential  nomination.  The  result 
is  that  when  a  vice  president  is  elevated  to  office,  he  is  only  a 
freak  of  politics.  It  was  the  idea  of  the  framers  that  the  man 
second  in  choice  among  the  electors  should  be  the  vice  president, 
that  is,  the  defeated  candidate  for  the  presidency. 

The  irruption  of  political  parties,  however,  automatically 
produced  by  the  constitution  without  having  been  intended, 
caused  such  a  plan  to  mean  an  entire  change  of  policy  in  the 
government,  and  a  defeat  of  the  will  of  the  majority  on  the 
death  of  a  president  by  installing  his  opponent,  and  thus  it 
was  soon  relegated  to  the  alphabet  of  dead  letters. 

The  system  of  government  and  the  partisan  methods  of  selec- 
tion of  presidents,  do  not  result  in  the  selection  of  the  best  men 
for  the  presidency,  nor  the  men  the  public  would  prefer.  The 
constitution  is  imperfect  thus,  in  that  it  is  not  a  means  whereby 
the  will  of  the  people  can  be  expressed;  indeed  it  continually 


COMMISSION  GOYERN^IENT  153 

defeats  and  eireiimvents  the  will  of  the  people,  and  offers  no 
means  whereby  the  will  of  the  people  can  be  expressed  definitely 
on  any  given  subject. 

There  is  a  well  grounded  suspicion  that  the  framers  of  the 
constitution  were  influenced  by  motives  which  are  now  ascribed 
to  the  "interests."  In  those  days  men  of  wealth  occupied  high 
positions  on  that  account  alone.  Washington  was  a  man  of 
great  wealth,  and  the  demarkation  that  now  exists  between 
capital  and  labor  was  not  so  sharply  drawn.  The  constitution 
as  it  exists  is  an  instrument  under  which  the  pursuit  of  wealth 
may  be  cai-ried  on  to  the  greatest  possible  advantage,  and  it  is 
reasonable  to  suppose  that  the  Philadelphia  merchant  had  such 
a  consummation  in  view  when  he  took  a  hand  in  the  framing 
of  the  document. 

The  principal  defect  in  the  operation  of  the  constitution  is 
that  exhibited  in  city  governments  under  the  same  plan,  the 
scattering  of  responsibility  and  the  concentration  of  powers  at 
points  where  they  are  not  accessible  to  popular  control. 

The  division  of  the  legislative  and  judicial  powers  results  in 
laws  being  passed  by  one  body  and  passed  upon  by  another 
knowing  nothing  about  the  intentions  and  desires  of  the  legis- 
lators, and  only  able  to  enforce  the  law  as  it  reads.  This  pro- 
duces an  enormous  growth  of  technicalities  and  no  end  of  in- 
justice, because  the  law  makers  have  made  their  law  and  gone 
and  the  judges  have  no  option  but  to  enforce  it  and  no  means 
of  avoiding  the  absurdities  that  arise.  If  the  law  making  and 
judicial  powers  were  united  in  a  single  body,  those  responsible 
for  its  absurdities  would  come  in  contact  with  them  in  its  en- 
forcement and  would  then  be  compelled  to  eliminate  them. 

In  most  constitutional  monarchies  and  in  other  republics, 
the  cabinet  expresses  at  all  times  the  will  of  the  people  and  is 
usually  composed  of  the  most  eminent  men,  not  the  second 
raters  that  get  into  American  cabinets.  Should  their  views  be 
out  of  accord  with  the  majority,  the  cabinet  falls  and  a  repre- 
sentative cabinet  replaces  it.  Such  a  cabinet  is  a  living  thing 
and  a  real  power.  The  American  cabinet,  however,  is  only  a 
collection  of  political  obligations,  without  any  political  flexi- 
bility, expressing  nothing  and  standing  for  nothing.  To  call 
them  cabinet  ministers,  even,  is  ludicrous.  Yet  they  have  al- 
most unlimited  powers  in  their  own  departments,  without  any 
responsibility,  save  to  the  whim  of  the  president. 

In  European  countries,  should   the  administration  and  the 


154  THE  PRICE  OF  INEFFICIENCY 

cabinet  feel  that  they  are  right,  in  the  face  of  a  hostile  assem- 
bly the  ruler  or  president  may  dissolve  the  assembly  itself  and 
go  before  the  country  for  a  new  election.  The  public  thus  has 
a  means  of  expressing  itself  on  any  topic  of  sufficient  importance 
to  warrant  it,  at  any  time  and  at  the  right  time. 

The  American  public  has  no  such  opportunity.  Elections 
are  held  at  fixed  periods,  irrespective  of  vital  questions,  and 
great  disturbance  of  business  has  thus  to  be  undergone  period- 
ically without  any  great  questions  being  decided  as  such;  the 
only  thing  being  decided  being  the  persons  returned.  What  the 
issues  of  these  periodical  campaigns  will  be,  can  never  be  told 
in  advance,  and  definite  decisions  on  the  policies  of  the  countiy 
are  formed  with  great  difficulty,  and  usually  not  at  all  by  the 
public,  unless  of  the  greatest  importance. 

The  administration  must  go  before  the  public  on  its  record 
as  a  whole,  and  approval  or  disapproval  of  parts  can  only  be 
approximately  determined;  indeed  a  president  may  be  elected 
on  the  strength  of  his  personality,  irrespective  of  issues. 

Thus  the  dominant  party  may  continue  a  great  number  of 
small  abuses  in  effect,  which  are  quite  beyond  remedy  by  the 
public,  since  questions  of  greater  policy  overshadow  them. 
Thus  the  ruling  party  carries  many  abuses,  and  is  wrong 
and  out  of  the  spirit  of  the  times  on  many  questions,  but  owing 
to  the  prominence  of  its  leading  issues  it  continues  in  power. 

A  ruling  party  finally,  however,  becomes  so  overgrown  with 
abuses  that  they  sink  the  political  ship,  the  minor  abuses  in 
the  aggregate  being  more  important  than  the  main  issue,  and 
the  new  party  cleans  the  political  house.  Self  interest  can  thus 
manifest  itself  in  political  actions,  up  to  about  49%  of 
the  party  actions.  This  is  the  main  cause  of  American  mis- 
government  and  governmental  inefficiency. 

The  system  of  the  selection  of  the  candidates  for  president 
is  such  that  the  strongest  men  of  the  country,  having  by  their 
strength  aroused  animosities  and  jealousies,  are  unable  to 
secure  the  nomination,  and  compromise  men  are  selected,  chiefly 
distinguished  for  not  being  objectionable  to  any  faction. 

A  sort  of  harmless  type  of  person  thus  has  the  best  chance 
of  becoming  an  American  president,  and  it  is  a  fact  that  the 
presidents  of  the  United  States  have  been,  during  its  history, 
by  no  means  its  leading  men.  This  is  a  fault  of  the  constitu- 
tional system  which  is  held  in  such  absurd  veneration.  Almost 
fanatical  are  those  who  hold  the  tenets  of  the  separation  of  the 


CO]\miSSION  GOVERNMENT  155 

legislative,   judicial   and  executive   functions,   and   that   repre- 
sentation should  be  local  in  nature. 

The  result,  however,  of  the  separation  of  the  powers,  is  a 
highly  cumbersome  and  inefficient  organization.  The  laws 
passed  by  congress  are  usually  written  by  some  one  man  in  a 
committee,  or  a  friend  of  his,  and  careful  and  mature  delibera- 
tion of  them  by  the  whole  congress  is  a  physical  impossibility. 
The  government  is  thus  a  government  by  secret  committee,  and 
the  laws  are  actually  drafted  by  outside  interests,  those  seeking 
favors  and  men  with  hobbies.  It  is  stated  that  the  Aldrich 
plan  for  new  banking  legislation  was  really  drawn  by  a  mem- 
ber of  a  prominent  banking  house  in  New  York.  In  whose 
interest  such  a  law  would  be  it  is  easy  to  imagine.  It  is  only 
another  example  of  the  old  Philadelphia  merchant  plan  of  legis- 
lation. 

After  a  law  is  passed,  a  long  wait  ensues  before  the  courts, 
in  reality  the  dominant  branch  of  the  government,  through 
outliving  the  presidents  by  whom  they  are  appointed,  through 
their  small  personnel,  and  the  great  powers  vested  in  them,  de- 
cide w^hether  the  law  is  constitutional  or  not. 

The  power  of  the  court  is  so  great  that  it  practically  legis- 
lates any  disputed  point,  but  the  long  delay  before  the  matter 
can  be  adjudicated,  causes  loss  and  stagnation  at  every  turn. 

Another  of  the  great  defects  of  the  present  system  is  that  the 
country  is  ruled  as  a  collection  of  parts,  and  not  as  a  whole. 
As  has  been  described,  each  congressman  is  for  his  own  locality, 
and  his  own  personal  interests.  The  result  is  that  the  country 
is  governed  as  a  collection  of  units,  the  resultant  of  discordant 
forces,  negatively  so  to  speak,  rather  than  as  a  whole,  the 
resultant  of  general  tendencies  and  for  the  general  good,  posi- 
tively. 

The  effect  of  this  congressional  representation  by  districts  is 
to  repress  the  will  of  the  people  in  that  it  makes  the  establish- 
ment of  new  political  parties  almost  an  impossibility,  and  prac- 
tically denies  representation  to  large  minorities. 

Unless  a  new  political  party  is  strong  enough  to  muster  a 
majority  in  a  congressional  district,  it  has  no  representation  in 
congress  whatever.  If  for  example,  there  were  35%  each  of 
republicans  and  democrats  in  the  United  States,  and  30%  of 
a  new  party,  the  new  party  would  have  no  representatives  in 
Congress  unless  its  members  segregated  themselves  by  moving 
into  certain  districts  previously  agreed  upon. 


156  THE  PRICE  OF  INEFFICIENCY 

But  if,  for  example,  there  were  25%  of  republicans,  20%  of 
democrats,  20%  of  socialists,  20%  of  prohibitionists  and  15% 
of  populists,  generally  distributed  over  the  country  as  a  whole, 
as  is  usually  the  case,  fully  three-quarters  of  the  voters  would 
be  deprived  of  representation. 

AVhile  this  condition  does  not  obtain  at  present,  yet  the  large 
socialistic  and  prohibition  parties  which  have  cast  a  large  vote 
throughout  the  country  for  years,  have  had  practically  no  rep- 
resentation in  congress,  and  have  no  prospect  of  effective  repre- 
sentation unless  they  become  dominant  parties. 

Certainly  a  system  thus,  under  which  it  is  impossible  for  a 
large  proportion  of  the  voters  to  have  representation,  is  far 
from  perfect.  Even  corporations  do  not  treat  their  stock- 
holders as  badly,  and  the  constitution  might  take  a  much  needed 
lesson  from  the  by-laws  of  the  trusts,  and  establish  cumulative 
voting.  This  would  be  accomplished  by  allowing  the  voters  to 
vote  at  large  for  their  congressmen,  that  is  a  resident  of  one 
district  might  cast  his  vote  for  a  candidate  in  some  other  dis- 
trict. By  agreement,  the  voters  of  a  party  over  all  the  United 
States  could  concentrate  their  votes  on  candidates  in  certain 
districts,  thus  insuring  a  proportionate  representation  of  min- 
ority parties  in  congress. 

The  effect  of  such  a  plan,  allowing  for  example,  prohibition- 
ists in  Indiana  to  vote  for  a  congressional  candidate  in  Georgia, 
and  socialists  in  New  York  to  concentrate  on  a  socialistic  can- 
didate in  Wisconsin,  would  have  a  profound  effect.  It  would 
enable  numerous  new  parties  to  spring  up  as  if  by  magic,  and 
the  individual  voter  could  vote  on  the  subject  which  he  deemed 
of  the  greatest  importance,  instead,  to  have  his  vote  effective, 
of  being  compelled  to  vote  either  the  republican  or  democratic 
tickets,  standing  for  many  things  with  which  he  has  no  sym- 
pathy along  with  the  things  he  votes  for. 

It  would  make  congress  a  true  index  of  the  will  of  the  people 
and  would  break  the'  grip  of  the  politician  so  long  held  through 
the  bi-partisan  system  now  automatically  produced  by  the 
method  of  selecting  congressmen  under  the  constitution. 

The  framers  of  the  constitution  did  not  contemplate  the  two 
party  government  which  resulted  from  their  document,  in  fact 
they  had  quite  a  different  scheme  in  mind,  but  the  system  pro- 
duced the  two  party  method  and  there  will  never  be  a  third 
party  of  any  consequence  as  long  as  the  present  constitutional 
provisions  of  election  by  districts  is  continued. 


co:mi^iission  govern^ient  157 

The  plan  of  voting  thus  for  congressmen  at  large  could  be 
operated  in  the  states  separately,  without  applying  to  the  whole 
country,  and  still  produce  great  effects,  since  in  the  more  popu- 
lous states,  the  concentration  of  votes  in  certain  districts  would 
he  sufficient  to  effect  the  election  of  respectable  representations 
for  the  various  new  parties. 

A  further  advantage  of  the  cumulative  plan  would  be  the 
smashing  of  the  "pork  barrel."  Congressmen  elected  at  large 
would  be  under  no  obligation  to  the  voters  in  their  districts,  and 
not  expecting  reelection  from  them,  would  not  attempt  to 
curry  favor  by  securing  special  appropriations.  Being  elected 
at  large,  there  would  be  no  occasion  or  even  possibility  of  a 
system  of  patronage,  as  such  representatives  would  serve  the 
whole  interest  of  the  country,  rather  than  those  of  certain  dis- 
tricts. The  country  would  thus  be  governed  as  a  whole,  or 
in  the  state  mentioned,  as  a  group  of  states,  rather  than  as  an 
aggregation  of  small  parts,  each  striving  for  its  own  interest. 

In  Germany,  although  the  rule  of  representation  by  districts 
is  similar  to  ours,  there  are  numerous  parties  in  the  Reichstag, 
due  to  the  habits  of  the  German  people  to  segregate  themselves 
in  districts.  Thus  in  a  town,  the  Catholics  will  usually  live  in 
one  section  and  the  Protestants  in  another.  Socialists  are 
found  congregated  in  industrial  districts  and  thus  each  is  pro- 
portionately represented.  Unless  Americans  localize  their 
abodes  according  to  their  political  faiths,  the  present  inequit- 
able plan  vrill  continue  to  prevail. 

In  Germany  a  candidate  may  ran  in  two  different  districts, 
thus  being  sure  of  election  in  one.  If  he  carries  both,  he  has 
the  option  of  saying  which  one  he  will  represent,  and  an  after 
election  is  held  in  the  other.  In  England  elections  are  not  held 
simultaneously,  and  a  candidate  for  parliament  defeated  in  one 
district  may  run  in  another  later. 

Thus  the  real  leaders  of  the  party  are  sure  of  reelection, 
while  in  the  United  States  the  best  and  brightest  men  are  con- 
tinually being  retired  through  narrow  majorities  in  the  dis- 
tricts in  which  they  live. 

The  American  plan,  too,  requiring  the  residence  in  the  dis- 
trict represented,  has  the  effect  of  producing  a  fever  of  politi- 
cal activity  all  over  the  country,  and  of  stirring  up  political 
ambitions  in  all  sorts  of  men,  desirous  of  distinction  but  un- 
qualified for  legislative  duties,  who  might  better  be  left  in 
obscurity  in  favor  of  the  real  leaders  of  thought  and  action 


158  THE  PRICE  OF  INEFFICIENCY 

who  cannot  be  expected  to  scatter  themselves  in  remote  districts 
for  the  sake  of  political  advancement,  but  who  under  a  better 
system  could  remain  in  centers  of  civilization  and  progress,  and 
still  be  of  great  value  in  the  councils  of  the  nation. 

The  very  low  grades  of  men  generally  found  in  the  minor 
positions  of  American  politics  would  thus  be  largely  eliminated. 
Of  particular  value  would  be  the  dispensing  with  the  thick 
skinned  office  holder,  who  makes  a  desperate  fight  for  his  office 
when  he  meets  with  criticism. 

The  American  office  holder  as  a  rule,  has  no  such  sense  of 
honor  and  propriety  as  is  produced  by  other  governmental  sys- 
tems in  their  office  holders,  who  when  questioned  immediately 
tender  their  resignations.  They  thus  demand  almost  unani- 
mous support  and  receive  it  as  long  as  they  remain  in  office. 
Thus  both  the  office  and  the  official  is  respected.  In  America, 
the  caliber  of  office  holders  is  such  that  it  is  a  popular  saying 
that  though  some  are  fired  and  some  die,  none  ever  resign. 

A  further  defect  in  the  governmental  system  of  the  United 
States  lies  in  the  fact  that  the  candidate  receiving  the  largest 
number  of  votes  in  the  electoral  college  for  president,  may  not 
be  the  one  receiving  the  largest  number  of  votes  of  the  voters, 
a  direct  defeat  of  the  will  of  the  people. 

While  congress  has  not  developed  the  graft  and  corruption 
of  legislatures  and  aldermanie  bodies,  it  is  because  the  congress- 
man is  actually,  though  not  relatively,  more  conspicuous,  and 
because  the  great  size  of  the  assembly  makes  the  task  of  the 
briber  much  more  difficult.  In  addition,  congress  is  not  a 
franchise  granting  body  in  the  ordinary  sense,  though  the  in- 
fluence of  the  protected  manufacturers  is  so  great  as  to  amount 
practically  to  corruption. 

Congress  is  notorious  for  log  rolling.  It  is  highly  inefficient 
as  an  organization,  and  has  created  an  official,  the  speaker, 
second  in  power,  if  not  superior,  to  the  President,  an  official 
hardly  considered  in  the  constitution. 

Congress  even  comes  in  for  criticism  at  the  hands  of  satirists 
of  the  stage.  Cliff  Gordon  is  always  sure  of  laughter  and  ap- 
plause in  vaudeville  with  the  following  estimate  of  the  institu- 
tion: 

"People  claim  that  our  congress  is  to  blame  for  the  present 
condition  of  things.  But  look  at  Russia !  The  people  over 
there  are  fighting  to  have  a  congress.  Why  not  let  them  have 
ours?     The   Russian   congress  is   called   the   Duma.     It  meets 


CO^VmiSSION  GOVERNMENT  159 

once  a  j'ear  in  the  morning  and  is  dissolved  at  night.  Then 
they  meet  the  next  year  and  get  dissolved  right  away  again. 
Lots  of  people  laugh  at  Russia — but  they  know  what  to  do  with 
a  congress.  And  noAV  the  congressmen  speak  of  moving  con- 
gress from  Washington  to  Philadelphia.  They  want  to  get 
closer  to  the  mint." 

Congress  is  notorious  for  many  abuses,  and  its  virtues  may 
be  as  readily  exercised  by  other  bodies.  Would  it  not  be  bet- 
ter, therefore,  to  abolish  the  present  system  and  consolidate 
the  executive,  legislative  and  judicial  powers  instead  of  keep- 
ing them  separate?  Instead  of  one  president,  have  a  board  of 
five  presidents,  with  all  power  in  their  hands,  chosen  in  a  non- 
partisan manner.  Such  a  body  would  work  as  well  nationally 
as  the  local  boards  do  in  cities,  if  constructed  on  the  same  prin- 
ciples. The  expedient  of  the  initiative,  referendum  and  recall 
would  supply  the  direct  appeal  to  the  public  seen  in  the  votes 
of  confidence  in  European  cabinets.  The  presidential  board 
would  have  unlimited  authority  and  would  be  individually  re- 
sponsible. Incidentally  by  continuing  them  in  office  until  re- 
called, the  curse  of  presidential  elections  would  be  done  away 
with. 

This  may  appear  a  revolutionary  proposal,  but  it  is  not. 
The  country  is  in  reality  ruled  at  present  by  a  board  of  com- 
missioners. The  final  power  is  in  the  Supreme  Court,  in  effect 
a  set  of  commissioners.  They  exercise  legislative  and  judicial 
functions,  but  they  are  appointed  by  the  president  and  the  laws 
reach  them  in  a  circuitous  and  long  delayed  fashion.  Why  not 
elect  them  directly  by  the  people,  free  from  partisan  influences, 
and  take  politics  out  of  business  and  business  out  of  politics 
for  ever. 

Eventually  the  country  will  come  to  some  such  plan  in  form 
as  it  is  now  in  effect.  The  Constitution  is  defective,  antiquated 
and  unsuited  to  the  purposes  of  libert3^     It  is  bound  to  go. 


CHAPTER  XII 
INDUSTRIAL  HANDICAPS  I 

The  passing  glory  of  American  inventors — Why  American  engineers  are 
straggling  far  behind  in  the  world's  progress — America  from  five  to 
twelve  years  behind  the  times  in  important  industries — Empty  boasts 
of  scientific  progress — 100  important  inventions  originated  abroad — • 
Industrial  supremacy  of  Germany — How  achieved  in  the  face  of  great 
odds — How  science  helps  industry — The  German  national  testing  offices 
— All  the  facilities  of  the  government  at  the  command  of  the  German 
manufacturer — How  the  American  manufacturer  works  in  the  dark — 
The  vicious  American  patent  system — Plow  it  discourages  inventions — 
Better  to  abolish  it  entirely — How  it  pays  the  patent  lawyer  to  adver- 
tise— Enormous  losses  of  inventors  and  the  public  through  patent 
abuses — The  farcical  rules  of  the  patent  office — How  the  inventor  fails 
to  get  a  square  deal  from  the  government — Millions  for  imitation,  not  a 
cent  for  original  research — Corporations  as  patent  dogs  in  the  manger — 
Bottling  up  of  valuable  patents — The  father  of  aviation  in  America — 
Lilienthal's  achievements — Stagnation  in  aviation  due  to  "show-me" 
spirit  of  business  men — Patriotic  support  accorded  Count  Zeppelin  in 
Germany — Absurd  position  of  the  United  States  Government  on  avia- 
tion. 

"Everybody  is  familiar  with  the  claim  that  American  in- 
ventors, engineers  and  manufacturers  lead  the  world.  A  vast 
amount  of  boasting  has  been  done  about  American  ingenuity 
and  originality  and  enterprise.  If  this  claim  were  well- 
founded,  it  would  be  indeed  a  matter  for  national  pride;  and 
a  quarter  of  a  century  or  more  ago,  such  a  claim  had  a  good 
deal  to  justify  it.  There  are  a  number  of  fields  of  inventions 
and  manufacture  in  which  the  pioneer  work  was  done  by  Amer- 
icans and  in  which  the  statistics  of  experts  still  testify  to  our 
high  standing. 

"But  when  one  views  the  whole  field  of  engineering  and  in- 
dustry and  particularly  the  progress  of  the  past  twenty-five 
years,  it  is  rather  humiliating  to  confess  that  instead  of  being 
in  the  lead,  the  United  States  is  lagging  far  in  the  rear,"  says 
the  Engineering  News  of  ]\Iay  25,  1911,  in  asking  the  question: 
"Why  is  Europe  in  advance  of  America  in  Pioneer  Inven- 
tions."    It  continues: 

160 


INDUSTRIAL  HANDICAPS  I  IGl 

"Take  for  example,  the  advances  made  in  iron  and  steel 
metallurgy  during  the  past  twenty-five  years.  Some  original 
contributions  have  been  made  to  the  art  by  American  inventors 
in  that  time,  of  course ;  but  the  great  advances  which  have  been 
made,  have  almost  all  originated  abroad.  We  are  to-day  some- 
thing like  five  years  behind  Germany  in  iron  and  steel  metal- 
lurgy^, and  such  innovations  as  are  being  introduced  by  our 
iron  and  steel  manufacturers  are  most  of  them  merely  follow- 
ing the  lead  set  by  foreigners  years  ago. 

"We  do  not  believe  that  this  is  because  American  engineers 
are  any  less  ingenious  or  original  than  those  of  Europe,  though 
they  may  indeed  be  deficient  in  training  and  scientific  educa- 
tion compared  with  those  of  Germany.  We  believe  the  main 
cause  is  the  wholesale  consolidation  which  has  taken  place  in 
American  industry.  A  huge  organization  is  too  clumsy  to  take 
up  the  development  of  an  original  idea.  With  the  market 
closely  controlled  and  certain  profits  by  following  standard 
methods,  those  w'ho  control  our  trusts  do  not  want  the  bother 
of  developing  anything  new. 

"We  instance  metallurgy  only  by  way  of  illustration.  There 
are  plenty  of  other  fields  of  industry,  where  exactly  the  same 
condition  exists.  We  are  building  the  same  machines  and 
using  the  same  methods  as  a  dozen  years  ago,  and  the  real  ad- 
vances in  the  art  are  being  made  by  European  inventors  and 
manufacturers, 

"Those  'effete  nations  of  Europe'  actually  appear  to  take  a 
certain  pride  in  doing  things  that  are  worth  while.  Original 
work  by  engineers  and  designers  is  encouraged  and  rew^arded. 
In  some  cases  American  manufacturers  take  up  these  foreign 
inventions  after  they  have  been  developed  on  the  other  side  of 
the  water,  and  after  four  or  five  years  the  new  improvement 
begins  to  be  introduced  here.  In  other  eases,  a  dozen  years  or 
more  elapse  before  any  American  has  enterprise  enough  to  in- 
troduce here  what  has  been  proved  to  be  excellent  on  the  other 
side  of  the  ocean. 

* '  It  would  be  easy  to  cite  fifty  or  a  hundred  important  inven- 
tions of  the  past  quarter  century  which  have  originated  in 
Europe  and  have  come  into  extended  industrial  use  there  and 
which  we  have  either  merely  copied  or  in  some  eases  almost 
ignored  here. 

"Take  for  example,  the  Diesel  engine.  Invented  nearly  a 
score  of  years  ago,  by  one  of  the  most  eminent  of  German  en- 


162  THE  PRICE  OP  INEFFICIENCY 

gineers,  it  is  to-day  so  little  used  in  the  United  States  as  to  be 
practically  unknown.  In  Europe,  on  the  contrary,  it  is  to- 
day attracting  more  attention  than  any  other  prime  mover. 
Diesel  oil  engines  are  now  being  fitted  to  ocean  vessels  of  large 
size.  Ship  and  engine  builders  in  England  and  on  the  conti- 
nent are  industriously  at  work  in  this  field.  Dr.  Diesel,  at  the 
London  meeting,  declared  that  Diesel  marine  engines  could  pro- 
duce a  horse-power  with  one-fifth  or  one-sixth  of  the  weight  of 
fuel  required  for  a  steam  engine.  The  enormous  importance 
of  such  a  reduction  in  the  fuel  supply,  and  the  resultant  in- 
crease in  cargo  capacity,  is  evident  to  anyone.  Prom  a  naval 
point  of  view  also,  it  is  pointed  out  as  among  the  possibilities 
of  the  near  future  that  a  battleship  may  yet  be  built  for  a  Euro- 
pean power,  which  will  be  able  to  sail  around  the  world  and 
home  again  without  taking  on  fuel  once." 

The  views  of  the  Engineering  News  are  a  confirmation  of  the 
facts  as  pointed  out  by  Mr.  L.  B.  Stillwell,  past  president  of 
the  American  Institute  of  Electrical  Engineers,  who  in  an  ad- 
dress at  the  dedication  of  a  new  hall  of  science  at  the  Rensselaer 
Polytechnic  Institute,  Troy,  N.  Y.,  said  in  part: 

*'The  voice  of  America  in  this  age  is  one  of  exultation.  If 
it  be  assumed  that  the  daily  press  speaks  for  our  people,  it  is 
not  infrequently  a  voice  of  boasting.  The  press  is  not  always 
discriminating  in  its  estimate  of  the  meaning  of  new  steps  and 
easily  falls  into  the  habit  of  exaggerating  the  value  of  a  new 
thing  and  over-estimating  its  probable  results.  The  man  in  the 
street  believes  that  We  easily  lead  the  world  in  science  and  in 
its  practical  applications,  but  those  better  informed  know  that 
we  have  strong  rivals;  that  while  practice  in  America  in  me- 
chanics and  the  electric  arts  compares  favorably,  as  a  whole, 
with  that  of  any  other  country,  the  discovery  of  the  facts  upon 
which  practice  is  based  has  been  more  often  European  than 
American.  Even  in  the  practical  applications  of  physical 
science,  it  happens  not  infrequently  that  we  follow  and  do  not 
lead. 

"The  German  Empire  is  a  vast  hive  of  industry,  organized 
in  a  manner  of  which  comparatively  few  Americans  who  have 
not  investigated  the  subject  have  anything  like  an  adequate 
conception.  In  an  interesting  and  very  valuable  paper  upon 
"Engineering  Education,"  read  before  the  International  En- 
gineering Congress  in  St.  Louis  in  1904,  Dr.  Robert  Fletcher, 
Director  of  the  Thayer  School  of  Civil  Engineering,  Dartmouth 


INDUSTRIAL  HANDICAPS  I 


163 


College,  said:  "Realizing  that  even  the  most  industrious  peo- 
ple must  have  competent  expert  direction  and  that  'efficient 
direction  of  any  industry  to-day  demands  a  large  amount  of 
technical  knowledge  which  cannot  be  learned  at  the  bench  or 
in  the  shop,'  the  German  government  and  the  people,  through 
trade  associations,  have  established  hundreds  of  schools  of  ap- 
plied science  for  instruction  in  all  the  leading  industries  of  the 
empire,  and  often  many  schools  for  the  same  industry'. 

"German  foresight  and  system  in  the  organization  of  edu- 
cational facilities  not  less  than  the  industry  and  the  frugality 
of  the  Gei-man  people  have  advanced  Germany  within  fifty 
years  from  a  position  of  comparative  poverty  and  obscurity  to 
a  place  in  the  foremost  rank  of  powerful  and  progressive  na- 
tions. As  Dr.  Fletcher  well  says :  '  It  is  not  her  army  of  soldiers 
which  other  nations  need  to  fear,  but  her  armies  of  scientifically 
trained  directors  of  industrial  enterprises  and  of  highly  edu- 
cated commercial  agents.' 

"While  no  other  nation  to-day  provides  as  effectively  as  do 
the  Germans  for  enlargement  of  the  boundaries  of  science  by 
original  research  nor  for  the  systematic  training  of  its  people 
in  the  industrial  and  commercial  use  of  scientific  facts  and 
methods,  there  is  very  much  that  is  admirable,  effective  and 
worthy  of  our  most  careful  consideration  in  the  educational, 
industrial  and  commercial  practice  of  some  other  of  the  great 
nations. ' ' 

W.  H.  Dooley  in  an  article  ' '  German  and  American  Methods 
of  Production"  in  the  Atlantic  Monthly,  for  May,  1911,  says: 

"The  average  American  thinks  that  the  success  of  Germany 
is  due  to  low  wages  and  long  hours  of  work.  This  is  not  true, 
for,  if  labor  is  cheaper  there,  coal  is  dear,  machinery  dearer, 
and  imported  raw  material  pays  a  tax.  The  industrial  su- 
premacy of  Germany  is  the  effect  of  definite  and  deliberate 
political  action.  Thirty  years  ago  the  German  statesmen  real- 
ized that  the  nation  was  inferior  to  the  American  and  English 
in  natural  resources  and  natural  ingenuity;  this  inferiority 
forced  upon  their  attention  the  value  of  thrift  and  of  education. 
Thrift  was  multiplied  by  capital,  and  education  multiplied  by 
industrial  efficiency. 

"Few  Americans  realize  the  vast  strides  which  the  German 
industries  have  taken  in  the  last  few  years.  The  great  iron 
and  steel  manufactures  of  the  Rhine  district — of  Dusseldorf, 
Essen,  Duisburg  and  Oberhausen — have  attained  a  remarkable 


164  THE  PRICE  OP  INEFFICIENCY 

development,  owing  partly  to  the  coal  mines  of  the  Rhineland 
and  Westphalia,  to  the  great  waterway  of  the  Rhine  and  an  excel- 
lent system  of  railroads,  and  partly  to  economic  conditions 
which  it  may  be  interesting  to  compare  with  our  own,  while  the 
rise  of  some  of  the  great  German  shops  reads  like  a  romance." 

Henry  S.  Pritchett,  President  of  the  Massachusetts  Institute 
of  Technology,  describes  Germany's  great  development  in  an 
article  "How  science  helps  industry  in  Germany,"  in  the  Re- 
view of  Reviews,  of  February,  1906  : 

"In  1870,  the  manufactures,  the  inventions  and  the  foreign 
commerce  of  the  separate  German  states  were  far  below  those 
of  England  and  of  France.  To-day  United  Germany  stands 
in  the  front  rank  of  the  nations  of  the  world  in  industrial  pro- 
duction, and  she  clearly  leads  all  other  nations  in  the  applica- 
tions of  science  to  industry  and  to  the  arts.  Her  position  is 
all  the  more  remarkable  because  this  result  has  been  achieved 
in  a  country  in  which  the  agricultural  and  mineral  resources 
are  not  great,  and  in  the  face  of  the  burdens  due  to  long  and 
costly  wars,  to  the  maintenance  of  a  great  army,  and  to  the 
draining  of  a  large  part  of  its  population  through  emigration. 
No  exploitation  of  the  virgin  resources  of  a  new  continent  nor 
millions  of  new  citizens  drawn  from  other  lands  have  brought 
Germany  the  unearned  increment  which  the  United  States  has 
enjoyed  during  the  same  three  and  one-half  decades. 

"The  reasons  for  this  tremendous  industrial  development 
are  several,  but  they  all  spring  more  or  less  directly  out 
of  the  strong  national  spirit  developed  by  the  accomplish- 
ment of  German  utility.  One  of  the  important  factors  has 
been  the  systematic  development  of  scientific  research  and  the 
application  of  research  to  the  practical  industrial  problems  of 
the  nation. 

"About  a  year  ago  I  heard  a  famous  chemist  in  Germany  ex- 
plain the  present  industrial  supremacy  of  his  country  in  words 
something  like  these: 

"  'Forty  years  ago,'  said  he,  'the  scientific  men  of  the  various 
German  states  devoted  their  study  almost  wholly  to  theoretical 
subjects.  They  were  humorously  described  as  given  up  to  in- 
vestigations of  the  dative  case  and  similar  impracticable  prob- 
lems. In  a  measure  this  was  true.  The  investigation  of  that 
day  had  a  wholesome  contempt  for  anything  which  promised 
direct  utilitarian  results.  But  the  development  of  the  spirit 
of  research  throughout  the  German  universities  trained  a  great 


INDUSTRIAL  HANDICAPS  I  165 

army  of  men  to  be  expert  investigators,  and  when  a  united 
Germany  arose  to  ero\\Ti  the  labors  of  William  I  and  of  Bis- 
marck, with  it  came  a  great  national  spirit  in  which  the  men 
of  science  shared.  They  realized  that  to  them  were  committed 
the  great  industrial  problems  which  must  be  solved  in  order  to 
make  the  nation  strong;  and  scientific  research,  which  up  till 
then  had  been  mainly  theoretical,  was  turned  to  the  immediate 
solution  of  the  industrial  problems  of  the  nation.  No  longer 
the  dative  case  alone,  but  the  development  of  the  chemical, 
electrical  and  mineral  resources  of  the  country  formed  the 
avenues  of  scientific  activity,  and  scientific  research,  which  had 
till  then  been  looked  upon  as  a  theoretical  accomplishment,  be- 
came the  greatest  financial  asset  of  the  Fatherland.'  There  is 
truth  in  this  statement.  The  research  habit,  long  cultivated 
in  German  universities,  had  nourished  a  body  of  men  trained 
to  research,  men  who  had  acquired  the  research  habit  and  the 
spirit  of  investigation.  When,  therefore,  the  problems  of  in- 
dustrial development  began  to  appeal  strongly  to  the  national 
spirit,  the  country  had  a  trained  body  of  men  to  call  upon  who 
threw  themselves  heartily  and  enthusiastically  into  these  prac- 
tical  industrial   problems. 

"Perhaps  the  unique  development  of  industrial  research  can 
be  appreciated  in  no  better  way  than  to  recall  the  evolution  of 
the  Royal  Testing  Office  {Bas  Koenigliche  Materials-pruefungs- 
amt),  which  began  thirty-five  years  ago  in  a  modest  shop  ad- 
joining the  engineering  school  at  Charlottenburg,  and  which 
has  within  the  last  two  years  been  transferred  to  a  new  and 
magnificent  series  of  buildings  at  Gross-Lichterfelde,  just  out- 
side of  Berlin. 

"The  meaning  of  this  establishment,  with  its  experts  and 
laboratories,  may  be  better  understood,  perhaps,  by  briefly  in- 
dicating some  of  the  problems  which  were  solved  in  it. 

"A  manufacturer  who  has  a  problem  on  his  hands  which  he 
finds  difficult  of  solution,  can  at  very  modest  expense  bring  this 
to  the  research  laboratory,  where  it  will  be  not  only  attacked 
by  the  experts  of  the  establishment,  but  the  experts  of  the  firm 
may  also  work  side  by  side  with  those  of  the  government  on 
the  common  problem.  The  advantage  which  is  thus  afforded 
to  the  manufacturer  can  hardly  be  overestimated,  for  he  finds 
in  the  government  establishment  not  only  a  corps  of  skilled 
and  enthusiastic  experts,  but  he  finds  also  all  the  literature  of 
the  subject,  brought  together  for  their  use  and  ready  at  hand 


166  THE  PRICE  OF  INEFFICIENCY 

for  convenient  reference.  The  problem  may  be  studied  in  the 
light  of  all  that  is  knowTi  on  the  subject,  and  starting  from  the 
point  of  the  world's  knowledge  rather  than  to  go  through  the 
tedious  plan  of  trying  out  methods  already  discarded  elsewhere. 

"It  is  worth  our  while  to  consider  this  idea  for  a  moment; 
and  the  great  difference  between  this  spirit  of  dealing  with 
the  manufacturer  and  the  inventor  and  that  pursued  in 
our  institutions.  Hardly  a  day  passes  at  any  scientific  es- 
tablishment in  America,  or  at  any  great  technical  laboratory, 
that  some  inventor  or  some  manufacturer  does  not  come  to  its 
doors  seeking  expert  aid  in  the  solution  of  his  technical  prob- 
lems. 

"He  is  told,  kindly  but  firmly,  that  the  laboratories  of  the 
institution  are  not  meant  for  his  sort  of  problem  and  when  he 
asks  anxiously  whither  he  may  go  for  such  expert  aid  and  ad- 
vice there  is  generally  no  source  to  which  he  may  be  sent  except 
to  employ  the  occasional  expert  with,  at  best,  meager  resources. 
I  must  confess  to  a  great  feeling  of  sympathy  with  such  appli- 
cants, notwithstanding  the  fact  that  many  of  them  are  cranks, 
and  many  othere  do  not  know  that  the  problems  they  pursue 
have  already  been  solved  or  found  insoluble. 

"It  is  true  enough  that  the  college  laboratories  are  in  no  con- 
dition to  undertake  many  of  these  investigations,  and  yet  this 
does  not  at  all  answer  the  fact  that  there  should  be  some  place 
well  equipped  whose  business  it  should  be  to  answer  such  in- 
quiries, to  sift  the  wheat  from  the  chaff,  to  tell  the  ignorant 
seeker  that  his  problem  is  already  solved,  and  to  point  the  man 
with  a  real  problem  to  the  way  for  a  solution." 

While  the  American  government  is  thus  inefficient  and  negli- 
gent in  not  providing  facilities  for  research  and  testing,  it  is 
not  in  that  department  that  it  exhibits  the  greatest  indifference 
towards  real  progress.  It  is  in  its  treatment  of  inventors,  the 
original  sources  of  the  industrial  progress  of  the  world,  that 
our  government  exhibits  a  degree  of  hypocrisy,  careless  injus- 
tice and  indifference  to  the  interests  of  the  public  and  the  in- 
ventor alike,  which  is  surpassed  by  no  other  country.  It  is  by 
no  means  an  exaggeration  to  say,  as  one  of  America's  leading 
engineers  and  inventors  of  applied  electricity,  H.  Ward  Leonard, 
does,  that  American  inventors  would  be  better  off  if  the  whole 
patent  system  were  abolished  at  a  blow. 

Writing  in  the  Electrical  World^  May  16,  1908,  Mr.  Leonard 
says : 


INDUSTRIAL  HANDICAPS  I  167 

"The  United  States  patent  system  purports  to  be  a  method 
of  rewarding:  inventors,  and  thereby  stimulating  the  production 
of  inventions  of  value  to  the  public. 

"In  reality  the  principal  beneficiaries  of  the  United  States 
patent  system  are  the  patent  lawyers  and  the  large  manufac- 
turing corporations. 

"There  is  no  class  of  brainworkers  in  the  world  so  dependent 
upon  another  class  as  are  the  United  States  inventors  upon  the 
United  States  patent  lawyers. 

"There  is  probablj^  not  an  experienced  inventor  in  the  United 
States  who  would  not  prefer  some  one  of  the  foreign  patent 
systems  to  our  patent  system,  unless  he  is  reallj^  a  representa- 
tive of  one  of  the  large  corporate  interests.  On  the  contrary 
practically  all  patent  lawyers  will  tell  you  that  the  United 
States  patent  system  is  the  best  in  the  world.  And  so  it  is,  for 
the  patent  lawyers.  But  it  is  probably  the  worst  in  the  world 
for  the  inventor. 

"As  a  class  the  American  inventors  are  a  most  helpless  class, 
and  are  growing  more  so  every  day.  Thej'  do  not  come  in  con- 
tact with  each  other  and  have  no  representative  organization. 
The  quality  of  American  patented  inventions  is  depreciating 
steadily.  This  is  the  natural  result  of  the  fact  that  the  in- 
ventor cannot  get  the  reward  which,  as  a  patentee,  he  is  entitled 
to.  Most  of  the  money  he  can  earn  has  to  be  spent  in  law^'ers' 
services  and  the  enormous  expenses  of  patent  interferences  and 
litigations,  and  meantime  the  large  corporations  continue  to 
appropriate  his  new  inventions  as  fast  as  he  patents  them. 
The  non-technical  and  inexperienced  judges  usually  fail  to  see 
the  invention  which  the  Patent  Office  saw,  and  hence  decline 
to  grant  preliminary  injunctions. 

"The  chief  sufferer  from  all  this  is  the  American  public, 
which  in  late  years  is  surprised  to  find  that  to  buy  the  latest 
and  best  inventions,  it  must  indirectly  pay  tribute  to  foreign 
inventors,  because  the  American  inventors  are  being  left  so  far 
behind. 

"Where  did  the  inventions  found  in  the  modern  automobile 
come  from?     Europe. 

"Where  did  the  designs  of  pur  best  battleships  come  from? 
Europe. 

"Wliere  did  the  inventions  as  to  recent  electric  railway  de- 
velopment  come   from?     Europe. 


168  THE  PRICE  OF  INEFFICIENCY 

""Where  did  the  revolutionary  inventions  in  high-efficiency 
incandescent  and  arc  lamps  come  from?     Europe. 

"It  is  unnecessary  to  extend  the  list.  Every  observer  knows 
that  while  twenty  years  ago  we  heard  almost  daily  of  import- 
ant inventions  of  American  inventors,  nowadays  we  are  obliged 
to  talk  of  the  inventors  of  the  past  generation  in  this  coun- 
try. 

"What  will  be  the  outcome  of  this  suppression  of  the  con- 
stitutional rights  of  the  American  inventors?  Probably  the 
outcome  will  be  the  still  further  combinations  of  capital  and 
new  boards  of  patent  control  and  further  increase  in  the  price 
to  the  public  of  every  manufactured  article. 

"What  is  the  relief  for  the  public  and  for  the  inventor? 
The  abolition  of  the  so-called  patent  rights  or  else  an  intelli- 
gent revision  of  the  laws  by  Congress  in  the  interests  of  the 
public  and  of  the  inventors. 

"The  interests  of  the  public  and  those  of  the  inventor  are 
in  common.  The  interests  of  the  large  corporations  and  of  the 
patent  lawyers  are  certainly  not  usually  in  common  with  those 
of  the  public  and  the  inventors. 

"It  is  to  the  interest  of  the  public  and  of  the  inventor,  that 
the  inventor  should  have  for  the  life  of  his  patent,  the  maxi- 
mum protection  at  the  minimum  cost  to  him,  because  this  en- 
ables the  inventor  to  make  new  inventions,  to  the  ultimate 
benefit  of  the  public  and  of  the  inventor.  The  corporate 
monopolies  rely  upon  capital  and  organization  more  than  upon 
inventions,  and  it  is  to  their  interest  that  the  unaided  inventor 
should  have  the  minimum  protection  and  should  have  the  maxi- 
mum, expense  in  trj'ing  to  establish  his  rights.  As  to  the  patent 
lawyer,  he  is  the  chief  beneficiary  of  the  minimum  protection 
and  maximum  expense  system. 

"Every  real  inventor  would  gladly  pay  to  the  government 
ten  times  the  present  patent  fees,  if  the  government  would 
stop  granting  improper  patents  upon  unpatentable  devices, 
and,  on  the  other  hand,  would  carry  out  its  agreement  with  him 
in  good  faith  whenever  he  is  really  entitled  to  a  patent, 

"If  the  government  cannot  afford  to  guarantee  at  its  present 
small  fee,  the  exclusive  right  it  purports  to  grant,  and  gets 
paid  for,  why  does  it  not  charge  the  inventor  enough  to  do  its 
work  properly  and  guarantee  its  grants  in  good  faith." 

In  another  article,  "Does  the  inventor  get  a  square  deal  at 
the  hands  of  the  United  States  Government"  in  the  same  pub- 


INDUSTRIAL  HANDICAPS  I  169 

ncation,  Mr.  Leonard  points  out  the  system  of  mulcting  the  in- 
ventor which  is  practiced  by  the  government. 

"The  report  of  the  Commissioner  of  Patents  for  the  year 
ending  Dee.  31,  1907,  contains  irrefutable  evidence  that  the 
government  is  neglecting  its  obligations  to  inventors  who  pay 
to  the  Patent  Office  nearly  $2,000,000  per  annum  in  order  to 
secure  patent  protection  for  their  inventions. 

"The  Constitution  of  the  United  States  says  'Congress 
shall  have  power  ...  to  promote  the  progress  of  science 
and  the  useful  arts  by  securing  for  limited  times  to  authors  and 
inventors  the  exclusive  rights  to  their  respective  writings  and 
discoveries. ' 

"The  greatest  inventor  of  all  the  ages,  if  he  were  living  to- 
day, might  publish  his  most  valuable  discover>^  under  the  im- 
plied contract  with  the  United  States  government  that  it  would 
'secure'  to  him  by  a  United  States  patent  the  exclusive  right 
for  a  limited  time  to  his  discovery,  and,  after  receiving  his 
United  States  patent,  he  would  find  that  although  he  had  per- 
formed his  part  of  the  contract  fully  and  in  good  faith,  he  had 
not  secured  the  exclusive  right  to  his  invention  for  17  years  as 
expected. 

"He  would  find  that  no  large  corporate  interest  would  re- 
spect his  patent  rights  unless  he  was  able  and  prepared  to 
spend  many  of  the  17  years  and  tens  of  thousands  of  dollars 
to  establish  the  correctness  of  the  judgment  of  the  government 
in  granting  the  patent  to  him,  which  was  exactly  what  he  had 
already  paid  the  government  to  do.  Under  no  conceivable 
practical  circumstances  would  he  be  'secured'  by  the  govern- 
ment in  having  for  17  years  the  exclusive  right  to  his  discovery, 
which  is  what  he  was  led  to  expect  he  would  receive  in  return 
for  disclosing  his  discovery,  and  paying  all  the  necessary-  costs 
of  the  government  investigation  of  his  claim  as  against  the 
original  inventor,  and  all  other  costs  of  every  kind  incidental 
to  the  grant  of  the  patent  to  him. 

"The  recent  report  of  the  Commissioner  says  .  .  .  the 
surplus  in  the  treasury  to  the  credit  of  the  Patent  Office  on 
Jan.  1,  1908,  was  $6,706,181.64.  This  surplus  of  the  net  re- 
ceipts over  all  expenditures  has  been  derived  entirely  from  the 
fees  paid  by  the  inventors  of  the  country,  directly  or  indirectly. 

"In  speaking  of  the  'insufficient  force  of  examiners  and 
clerks,'  the  commissioner  says: 

"Their  efforts  under  these  conditions  were  at  best  spasmodic 


170  THE  PRICE  OF  INEFFICIENCY 

and  simply  resulted  in  thousands  of  actions  being  made  which 
"were  nothing  more  than  frivolous  ...  A  great  many  ap- 
plications were  passed  to  issue  that  were  not  ready  for  patent, 
with  the  result  that  the  inventors  and  o^\Tiers  of  meritorious  in- 
ventions forfeited  valuable  rights  by  these  careless,  ill-consid- 
ered and  hasty  actions  on  the  part  of  the  patent  office 
Complaints  against  the  conduct  of  affairs  in  this  office  have 
been  numerous,  and  many  have  been  based  on  good  and  suffi- 
cient grounds." 

' '  It  seems  evident  from  these  quotations  and  from  facts  famil- 
iar to  all  who  have  to  do  with  patents,  that  inventors  are  not 
justly  treated  by  the  government  as  to  the  granting  of  patents. 
Eveiy  year,  our  patent  system  becomes  more  complicated,  more 
expensive  to  the  inventor  of  a  valuable  discovery,  more  un- 
trustworthy, more  unjust  and  more  absurd.  The  rights  and 
opinions  of  inventors  themselves  seem  to  be  considered  of  no 
importance  as  compared  with  those  of  patent  lawyers  and  large 
corporate  interests,  many  of  which  exist  solely  upon  the  dis- 
coveries of  unrewarded  inventors. 

"Our  patent  system  seems  to  be  based  upon  many  absurd 
assumptions,  among  which  may  be  enumerated  the  following: 

"It  is  assumed  that  the  half-paid  men  who  act  as  examiners 
are  invariably  and  absolutely  trustworthy  and  are  incapable 
of  intentionally  or  unintentionally  betraying  the  trust  imposed 
in  them  when  the  inventor  confidentially  discloses  his  discover- 
ies to  the  Patent  Office,  or  of  acting  unfairly  as  between  rival 
applicants.  The  Commissioner  says  in  his  report:  'The  office 
has  become  merely  a  post-graduate  school  for  the  technical  and 
legal  education  of  young  college  men  who  enter  the  service. 
The  General  Electric  Company  has  in  its  patent  department, 
twelve  or  more  men  who  were  formerly  examiners  in  this  office, 
and  other  corporations  have  taken  hundreds  of  them  from  the 
office. ' 

"No  doubt,  the  examiners  are  as  good  as  and  no  better  than 
the  average  college  graduate.  As  to  whether  such  men  are  in- 
variably and  absolutely  trustworthy,  the  records  of  the  public 
press  clearly  show.  One  fact  is  evident — the  'corporations' 
find  that  it  paj's  them  to  hire  these  Patent  Office  examiners  by 
the  'hundreds'  or  they  would  not  do  so." 

Mr.  Leonard  continues  his  protest  against  the  injustice  of  the 
patent  system  by  showing  how  it  places  a  premium  upon  forgery 
and    perjury,   when   two   inventors  have   applications  pending 


INDUSTRIAL  HANDICAPS  I  171 

for  a  patent  on  the  same  invention,  usually  the  case  when  a  true 
inventor  is  waiting  for  a  patent  and  a  rascal  finds  out  the  facts 
and  files  his  application  for  the  same  invention  and  then  proves 
by  perjured  testimony  that  he  Avas  the  first  to  "invent"  the 
thing.  He  also  points  out  that  many  patents  are  issued  to 
"inventors"  of  inventions  which  are  already  covered  by  the  ap- 
plications of  previous  true  inventions  not  yet  acted  upon,  and 
that  many  patents  are  issued  covering  devices  that  are  public 
property,  both  abuses  of  the  gravest  sort.  Speaking  of  the 
advertisements  of  patent  lawyers,  which  are  so  noticeable  a 
source  of  revenue  to  practically  all  publications,  which  keeps 
them  silent  on  the  injustice  to  inventors,  he  says: 

"When  one  remembers  that  it  evidently  pays  some  patent 
laAA-yere  to  advertise  in  every  publication  in  the  land  to  'patent 
your  inventions'  it  is  apparent  that  all  but  a  small  percentage 
of  the  patents  which  issue  are  merely  a  means  of  securing  gov- 
ernmental aid  in  mulcting  inexperienced  men  into  applying  for 
a  detail  patent  upon  a  worthless  modification  of  a  well  kno^vn 
device. ' ' 

Referring  to  one  of  the  worst  features  of  the  patent  system, 
the  absurd  and  involved  multiplicity  of  claims  attached  to  pat- 
ents which  are  even  to  patent  lawyers  almost  if  not  quite  unin- 
telligible, he  says: 

"The  United  States  patent  depends,  not  on  the  real  invention 
which  the  inventor  has  made  and  published  in  good  faith,  but 
on  the  contrary,  depends  principally  upon  the  refined  use  of 
peculiar  phrases  and  punctuation  points  in  a  series  of  ridicu- 
lously spun-out  claims  necessitated  by  the  United  States  patent 
system  in  order  to  prevent  an  infringer  from  hiding  behind 
some  semicolon  or  other  equally  absurd  shield." 

The  system  of  claims,  often  upwards  of  a  hundred  in  number 
attached  to  patents,  is  a  noxious  growth  of  verbiage  which  is 
chargeable  to  the  hair  splitting  of  judges.  ]\Iany  years  ago, 
they  decided  that  irrespective  of  the  invention  shown  in  the 
main  body  of  the  specification  of  the  patent,  where  the  real 
invention  is  described,  if  the  claims  appended  did  not  exactly 
cover  it  in  the  most  minute  fashion,  the  whole  invention  was 
lost.  The  incalculable  amount  of  damage  that  has  been  done 
to  inventors  and  the  people  of  the  United  States  by  this  hair 
splitting  decision  it  is  impossible  to  estimate.  To-day  inven- 
tions are  not  decided  on  their  merits,  but  exclusively  on  the 
adroitness    and    subtlety    with    which    the    patent    lawyer   has 


172  THE  PRICE  OF  INEFFICIENCY 

drawn  the  claims.     This  is  one  of  the  accursed  farces  which 
lawyers  inflict  upon  the  public  which  supports  them. 

The  United  States  government,  as  we  have  seen,  gets  $2,- 
000,000  in  profit  per  annum  out  of  the  inventors.  The  patent 
lawyers  get  at  least  $10,000,000  from  the  inventors  for  taking 
out  these  patents.  The  public  gets  the  benefit  of  the  discover- 
ies. What  do  the  individual  inventors  get  for  their  discover- 
ies? 

It  is  probably  true  that  the  average  United  States  inventor 
would  be  better  off  if  there  were  no  United  States  patents  of 
the  present  kind.  In  that  case,  the  inventor  could  use  his 
money  in  marketing  his  discovery,  and  his  manufacture  would 
not  be  embarrassed  by  the  many  improperly  granted  patents 
to  wealthy  competitors,  which  patents  he  must  to-day  respect 
because  of  his  inability  to  spend  the  necessary  money  in  litiga- 
tions. Of  course,  so  long  as  the  present  patent  system  exists, 
an  inventor  cannot  afford  to  not  take  out  patents  while  his 
competitors  are  patenting  every  conceivable  detail. 

The  patent  system  of  the  United  States  has  thus  become  cov- 
ered with  barnacles  of  corporate  self  interest  and  growths  of 
lawyers'  technicalities.  There  comes  a  time  in  the  history  of 
every  institution,  as  in  the  voyages  of  a  ship,  when  progress 
seems  to  cease  and  former  effectiveness  is  lost.  At  such  a  time, 
the  vessel  must  go  to  the  dry  dock  and  be  cleared  of  the  foul 
accumulations  of  parasites.  The  United  States  patent  system 
has  reached  such  a  stage.  The  sooner  it  is  dry-docked  for  re- 
pairs the  better  off  the  whole  country  will  be,  for  the  American 
inventor  needs  only  a  fair  chance  to  redeem  himself.  To-day  he 
is  engaged  in  other  occupations,  for  invention  has  become  too 
costly  for  inventors  to  engage  in  it. 

The  attitude  of  indifference  to  the  great  value  of  experi- 
mental work  and  of  neglect  in  the  development  of  inventions  is 
illustrated  by  an  occurrence  which  was  reported  in  the  news- 
papers at  the  time  of  the  mobilization  of  the  American  troops 
on  the  Mexican  frontier. 

It  was  urged  on  President  Taft,  that  the  use  of  aeroplanes 
in  the  army  be  given  greater  attention,  but  the  president  was 
not  in  favor  of  the  plan,  being  reported  as  opposed  to  having 
the  United  States  spend  much  money  for  the  purpose.  He 
considered  it  wiser  to  let  other  countries  do  most  of  the  pre- 
liminary work  in  discovering  the  uses  of  aeroplanes  in  war, 
there  being  plenty  of  time  later  to  gamer  the  harvest  of  good 


INDUSTRIAL  HANDICAPS  I  173 

results,  if  any  such  should  appear,  which  other  countries  dis- 
covered. 

In  other  words,  the  president,  with  apologies  to  a  famous 
slogan,  meant:  ''i\Iillions  for  imitation,  not  a  cent  for  original 
research,"  or,  let  the  foreigners  experiment  and  perfect  and 
we  will  buy  a  book.  Thus  the  American  aeroplane  inventor  is 
encouraged.  And  the  attitude  of  the  president  is  that  of  most 
manufacturing  plants;  to  let  others  discover  and  then  appro- 
priate the  results  of  their  research. 

The  American  inventor,  in  addition,  has  in  the  experimental 
workshop  another  system  to  contend  with ;  that  of  being  charged 
by  the  hour  for  experimental  work;  usually  seventy  cents  an 
hour;  and  of  seeing  the  work  proceed  at  the  most  leisurely 
pace  which  the  shop  proprietors  can  devise.  Thus  in  the  de- 
velopment of  inventions,  the  first  cost  is  so  excessive  as  to 
discourage  a  great  number  of  improvements. 

The  United  States  patent  system,  while  originally  designed 
to  aiford  the  inventor  the  most  complete  protection  possible, 
in  doing  so  defeats  its  own  objects  in  many  eases.  A  patent 
if  it  is  finally  confirmied  by  the  courts  is  absolute  property. 
The  inventor  need  not  work  it  in  order  to  hold  it.  As  a  con- 
sequence, many  important  patents  are  acquired  from  inventors 
by  manufacturers  and  then  not  utilized  at  all.  The  inven- 
tion may  be  one  that  would  interfere  with  some  machinery 
of  the  manufacturer  already  on  the  market,  so  that  improve- 
ment is  quietly  laid  away,  the  inventor  loses  possible  royalties 
and  the  corporation  acts  the  part  of  a  dog  in  the  manger, 
neither  using  the  invention  itself  or  allowing  anyone  else  to 
do  so. 

Notable  among  the  inventions  of  this  character  now  bottled 
up,  is  the  three  phase  system  for  electric  railways,  which  stores 
up  power  while  the  car  runs  down  hill  to  be  utilized  later. 
As  this  would  have  made  it  possible  to  make  power  plants 
much  smaller  for  the  same  service,  and  w'ould  have  intro- 
duced a  new  line  covering  equipment  already  on  the  market 
for  the  purpose,  a  big  electrical  concern  purchased  the  rights 
and  laid  the  thing  away.  Meanwhile  it  continues  to  sell  to 
those  needing  power,  larger  and  more  costly  equipment  than 
would  be  necessary  if  the  invention  were  in  use.  Such  cynical 
employment  of  the  features  of  the  patent  law  intended  for 
the  benefit  of  inventors  and  the  public  may  well  cause  its  pro- 
visions to  be  questioned. 


174  THE  PRICE  OF  INEFFICIENCY 

It  is  a  well  recognized  fact  in  the  electrical  engineering 
circles  that  practically  no  progress  has  been  made  in  electrical 
illumination  for  years.  The  recent  improvements,  the  flaming 
arc  and  the  metallic  filament  lamps  which  consume  two-thirds 
less  current  for  the  same  illumination,  are  German  inventions. 
For  the  five  patents  on  the  latter,  one  prominent  American 
concern  paid  $1,010,000  in  addition  to  royalty.  This  is  the 
white  looking  incandescent  lamp,  known  as  the  tungsten  lamp 
and  also  by  the  trade  name  of  mazda. 

Behind  the  trade  name  of  "Mazda"  is  cloaked  one  of  the 
most  peculiar  propagandas  of  invention  and  commerce.  It  is 
part  of  what  may  be  termed  the  "Edison  tradition." 

The  writer  has  discussed  this  subject  in  the  technical  press 
and  the  following  is  a  quotation  from  an  article  of  his  in  the 
Electrical  World  of  November  16,  1912: 

"A  conspicuous  example  of  the  pervasive  qualities  of  the 
'Edison  tradition'  is  seen  in  the  name  being  given  to  the  tung- 
sten lamp,  a  German  invention,  as  is  well  known  to  the  engi- 
neering profession,  but  not  as  well  known  to  the  general  pub- 
lic. For  reasons  that  are  not  well  known,  the  name  tungsten, 
which  is  that  of  the  principal  element  of  the  filament,  has  been 
more  or  less  side-tracked,  as  far  as  it  has  been  within  the 
abilities  of  those  interested  to  change  a  great  public  recognition 
of  an  important  invention  by  attempting  to  dislodge  a  word 
that  the  public  has  universally  adopted  and  which  has  be- 
come embedded  in  the  language,  and  the  arbitrary  word 
'Mazda'  has  been  substituted  as  the  first  step  away  from 
tungsten,  while  the  'Edison-Mazda'  is  beginning  to  appear. 
No  doubt  finally  both  'Mazda'  and  tungsten  will  be  dropped 
and  the  'Edison  tradition'  will  be  restored  to  its  time-honored 
position  in  regard  to  lamps.  The  later  tungsten  lamp  will 
probably  become  the  new  Edison  lamp,  while  the  present  will 
be  knoAvn  as  the  old  Edison  lamp,  and  chiefly  remembered  as 
the  one  which  became  Edison  at  all,  as  the  result  of  a  court 
decision  against  a  poor  German  inventor. 

"In  the  immediate  past  the  curtain  has  suddenly  risen  on 
a  well-set  rural  scene,  the  'Edison'  farm.  It  has  been  dis- 
cussed before  engineering  societies  and  in  the  public  prints, 
and  the  latter  report  that  Edison  is  equipping  his  country 
house  with  all  kinds  of  electrical  devices.  Evidently  electric 
farming  in  the  United  States  is  marked  out  for  the  'Edison* 
label.    Yet  on  page  489  of  your  issue  of  Sept.  16,  1905,  some 


INDUSTRIAL  HANDICAPS  I  175 

seven  years  ago,  under  the  heading  of  'Electricity  in  Agricul- 
ture,' M.  E.  W.  Baker,  of  Barry,  111.,  directed  attention  to 
the  slow  progress  in  the  United  States  in  the  adaptation  of 
electricity  to  agriculture,  while  in  other  countries,  notably  Ger- 
many, rapid  advances  have  been  made.  Mr.  Baker  stated  that 
from  1893  to  1901  he  had  searched  the  index  of  the  Electncal 
World  and  Engineer  for  notices  of  electric  plo\\dng  and  found 
many  references,  but  all  to  'trials  made  in  Germany,'  and 
concluded:  'I  think  it  high  time  that  this  odious  German 
label  should  be  removed  in  a  branch  of  applied  science  where 
otherwise  we  Americans  stand  first.' 

"Since  that  time  (1905)  I  have  endeavored  in  a  modest  way 
to  arouse  interest  in  electric  farming  in  this  country  by  means 
of  articles  in  the  technical  and  general  press  and  in  other 
ways,  by  reporting  progress  and  results  under  practical  work- 
ing conditions  abroad  where  electric  farming  is  carried  on  to 
a  large  extent  as  it  has  been  carried  on  for  nearly  twenty  years. 
Nevertheless,  the  first  electric  plow  has  yet  to  turn  a  furrow 
in  the  United  States,  though  hundreds  of  thousands  of  acres 
have  been  plowed  by  electricity  abroad. 

"If,  however,  any  small  efforts  of  mine  have  been  the  cause 
of  attracting  the  attention  of  the  'Edison  tradition'  to  electric 
farming — for  a  long  while  I  was  practically  alone  in  calling 
attention  to  the  subject — I  shall  feel  honored  in  having  made 
that  contribution  to  an  ever  increasing  convention.  I  shall 
gladly  join  the  ranks  of  those  whose  ideas  have  gone  to  build 
up  the  marvelous  figure  of  the  inventive  superman." 

The  progress  Germany  has  made  in  street  illumination 
largely  due  to  their  originality,  may  best  be  judged  from  a 
quotation  from  an  article  "German  vs.  American  street  light- 
ing," by  Mr.  B.  F.  Pierce  in  "Public  Service"  for  February, 
1911 : 

"The  preeminence  of  Germany  in  all  that  pertains  to  il- 
lumination is  so  generally  acknowledged  that  ideas  from  Ger- 
man practice  are,  or  at  least  should  be,  welcome  to  every  pro- 
gressive illuminating  engineer.  In  street  lighting,  especially, 
Germany  has  far  outstripped  America;  in  fact,  there  is  scarcely 
a  single  street  in  the  United  States  to-day  that  could  be  called 
even  fairly  well  lighted,  according  to  German  standards. 

"Various  explanations  are  offered  as  to  tlie  obvious  inferi- 
ority of  America  in  this  respect,  but  few  of  them  are  at  all 
satisfying.     It  is  contended  by  some  that  the  greater  density 


176  THE  PRICE  OF  INEFFICIENCY 

of  population  in  Germany  permits  a  greater  expenditure  per 
mile  for  street-lighting  purposes.  This  will  hardly  hold  water, 
however,  as  many  well-lighted  German  cities  spend  less  per 
mile  of  street  than  American  cities,  which  are  undeniably 
poorly  lighted.  Another  equally  misleading  explanation  is  in 
the  low  cost  of  carbons  and  labor  in  Germany,  which  permits 
high  efficiency  arc  lamps  to  be  run  at  a  reasonable  cost.  This 
is  not  borne  out,  however,  by  a  comparison  of  the  cost  per  unit 
for  operating  such  lamps  abroad  and  at  home." 

German  superiority  in  this  respect  is  due  principally  to  her 
inventors,  and  to  the  efficient  manner  in  which  their  inventions 
are  utilized.  In  Germany  an  inventor  is  an  inventor,  not  a 
joke,  and  a  patent  is  a  patent  and  not  merely  a  license  to  bring 
a  law  suit. 

The  lax  administration  of  the  United  States  Patent  Office 
in  improperly  granted  patents,  few  of  which  get  through 
the  German  patent  office,  causes  a  vast  expense  in  litiga- 
tion and  wide  spread  discouragement  of  industry.  In  Lon- 
don an  American  patent  is  regarded  as  hardly  better  than 
a  French  patent,  which  the  French  government  does  not 
guarantee  in  the  slightest  respect.  In  France  the  inventor 
merely  files  his  application  and  a  patent  is  granted  forthwith. 
Thus  fifty  inventors  can  get  a  patent  on  the  same  thing  if  they 
desire.  But  they  work  under  no  misapprehension  about  it. 
The  system  is  similar  to  the  method  of  the  United  States  in 
granting  copyrights,  and  works  out  much  better  in  practice  than 
our  patent  system,  because  with  the  American  copyright  and  the 
French  patent,  the  matter  is  up  to  the  courts  from  the  start, 
and  whoever  proves  to  be  the  first  inventor  is  really  protected, 
while  in  the  American  patent  system,  the  first  inventor  is  too 
often  deprived  by  the  legal  machinery  of  all  his  rights  through 
no  fault  of  his  own.  In  the  French  patent  system  and  the 
American  copyright  system,  the  invention  or  the  work  is  pro- 
tected and  somebody  is  decided  to  be  the  first  inventor,  some- 
body gets  the  protection,  but  in  the  American  patent  system, 
somebody  generally  gets  cheated,  the  invention  is  fortunate  if 
it  is  not  lost  entirely  in  the  shuffle,  and  the  one  cheated  is  most 
apt  to  be  the  real  inventor.  This  comes  from  the  government 
pretending  to  do  a  thing  which  it  does  not  do. 

An  illustration  of  the  complicated  processes  of  the  patent  sys- 
tem, as  compared  with  Germany,  is  shown  by  the  fact  that  in 
London  the  possessor  of  a  German  patent  on  any  invention  of 


INDUSTRIAL  HANDICAPS  I  177 

value  can  readily  form  a  company  and  secure  capital  to  promote 
it,  or  he  can  sell  au  option  to  some  promoter  in  twenty-four 
hours,  while  the  holder  of  an  American  patent  in  London  finds 
all  doors  closed  against  him  unless  it  has  been  "adjudicated." 
That  is,  until  the  courts  uphold  it  after  years  of  litigation,  it 
has  no  value. 

Aviation  furnishes  a  new  commentary,  if  any  were  needed,  on 
the  imperfection  of  the  American  patent  system.  The  Wright 
brothers  have  been  granted  certain  patents,  in  fact  they  received 
them  before  aviation  was  an  established  thing,  and  shortly  after 
the  patent  office  outgrew  the  rule  that  aviation  patents  were 
based  on  impossibilities  and  could  not  be  granted  at  all  unless 
practical  demonstrations  were  shown.  It  is  claimed  that  the 
patents  to  the  Wrights  were  on  features  well  kno^vn  to  earlier  in- 
vestigators. If  this  proves  to  be  the  case,  and  the  Wrights' 
patents  are  shown  to  have  been  improperly  granted,  a  great  in- 
justice has  been  done  those  w^ho  are  being  sued  for  infringement. 
The  cost  of  litigation  of  this  character  which  is  always  drawn 
out  to  great  and  unnecessary  lengths,  with  large  expenses  for 
stenographic,  witness  and  other  court  costs,  is  so  much  money 
wasted  out  of  the  pockets  of  the  public  as  a  whole  eventually, 
and  immediately,  a  heavy  tax  on  the  persons  directly  involved. 

Of  greater  damage  is  the  discouragement  of  aviation,  owing 
to  the  possibility  of  the  Wrights'  patents  being  upheld,  which 
checks  and  will  continue  to  check  for  years,  the  proper  develop- 
ment of  the  art.  Not  only  will  the  infringers,  if  such  they  are 
proven  to  be,  be  compelled  to  pay  large  sums  to  the  Wrights, 
but  the  latter  are  charging  and  receiving  a  license  of  $100  a 
day  for  the  use  of  their  patents,  none  of  wiiich  is  ever  likely  to 
be  returned  in  any  event.  They  are  either  in  the  right  or  in 
the  wrong,  the  victims  of  grave  injustice  or  the  perpetrators 
of  an  outrageous  imposition  on  the  new  industry;  but  the  true 
culprit  is  the  patent  system  of  the  United  States  which  permits 
such  doubt  and  uncertainty  to  exist  and  be  continued,  for  no 
useful  purpose  whatever,  and  accomplishing  nothing  but  lining 
the  lawyers'  pockets,  while  the  industry  is  choked  at  its  very 
beginning. 

The  Scientific  American  of  May  13,  1911,  in  giving  a  bi- 
ographical sketch  of  Octave  Chanute  who  is  sometimes  called  the 
"Father  of  Aviation"  in  America,  states: 

"On  June  22nd,  1896,  accompanied  by  Mr.  W.  A.  Herring, 
and  two  assistants,  he  went  into  camp  among  the  sand  dunes 


178  THE  PEICE  OF  INEFFICIENCY 

on  the  southern  shore  of  Lake  Michigan,  to  study  the  art  of 
navigating  an  aeroplane  without  artificial  power.  He  and  his 
assistants  made  some  flights  with  a  Lilienthal  monoplane,  but 
finding  this  unsafe  and  treacherous,  they  discarded  it  in  favor 
of  the  multiplane  wing  glider  designed  by  Chanute,  which  after 
many  empirical  modifications  in  the  placement  of  the  sustain- 
ing surfaces,  assumed  the  form  of  the  ordinary  multiplane 
glider  of  the  present  day.  This  glider  resembled  the  Lilienthal 
biplane  in  having  the  surfaces  vertically  superposed,  the  rider 
below  them,  and  the  rudder  in  the  rear,  but  it  was  a  five  decker 
whose  wings  on  either  side,  could  swerve  fore  and  aft,  so  as  to 
bring  the  center  of  lift  always  over  the  center  of  gravity,  in 
order  to  prevent  excessive  rearing. 

"A  full  account  of  these  experiments  was  published  by  Mr. 
Chanute  in  the  Aeronautical  Annual  of  1897,  and  in  a  paper 
read  by  him  before  the  Western  Society  of  Engineers  in  the 
same  year.  This  paper  stated  that  the  experiments  were  promis- 
ing, and  invited  other  investigators  to  improve  upon  them. 
Presently  other  persons  in  other  countries  did  improve  upon 
them,  notably  the  Wright  brothers  and  Montgomery  in  America, 
the  Voisin  brothers,  Ferber  and  others  in  Europe. 

"In  March,  1900,  one  of  Mr.  Chanute 's  earliest  disciples,  Wil- 
bur Wright,  wrote  inquiring  of  him  as  to  the  best  materials  to 
be  used,  construction  of  his  machine,  the  most  suitable  place 
to  experiment,  etc.,  saying  that  he  had  notions  of  his  own  that 
he  wanted  to  try  and  that  he  knew  of  no  better  way  of  spending 
his  vacation.  All  that  information  was  gladly  furnished  and 
the  two  men  became  fast  friends. 

"]Mr.  Chanute  forwarded  a  quantity  of  aeronautic  literature, 
visited  the  camp  at  Kitty  Hawk,  North  Carolina,  where  Wilbur 
Wright  and  his  brother,  Orville,  made  their  first  glider  experi- 
ments, and  continued  their  steadfast  mentor  till  they  trans- 
formed the  glider  into  a  true  dynamic  aeroplane." 

According  to  Lougheed's  ''Vehicles  of  the  Air,"  Lilienthal 
is  given  a  high  place  among  the  pioneers  of  aviation : 

"Probably  no  other  worker  in  the  history  of  aeronautical 
science  is  entitled  to  a  higher  place  than  Otto  Lilienthal  whose 
early  and  thorough  investigations  have  formed  the  groundwork 
for  a  large  proportion  of  subsequent  successful  experiments. 
Lilienthal's  investigations  commenced  in  1871;  all  told  he  per- 
formed over  2,000  glides,  of  a  maximum  length  of  1,000  feet,  and 
a  maximum  speed  of  22  miles  per  hour.     In  1896  he  built  a 


INDUSTRIAL  HANDICAPS  I  179 

2^  horse  power  motor,  and  it  was  in  testing  this  power  propelled 
biplane  that  he  met  his  death  by  a  fall  from  a  height  of  50  feet, 
on  August  10,  1896." 

The  Wright  brothers  made  their  first  flight  with  a  power  pro- 
pelled biplane  at  Kitty  Hawk,  Dee.  17,  1903. 

It  might  here  be  of  interest  to  quote  further  from  Lougheed 
as  to  the  originality  of  wing  warping: 

"This  method  of  balancing,  which  is  perhaps  the  most  effect- 
ive known,  was  patented  in  France  by  D'Esterno,  was  used 
by  Le  Bris,  and  was  first  patented  in  the  United  States  by  Mouil- 
lard  (No.  582,757,  filed  Sept.  24,  1892,  issued  May  18,  1897, 
expiring  May  18,  1914).  Another  early  recognition  of  its  merits 
appears  in  the  Scientific  American  Supplement  of  June  4,  1881." 

Wing  warping  is  used  in  modern  machines,  such  as  the 
Wrights,  Bleriot,  Montgomery  and  other  machines. 

The  question  would  appear  to  be  pertinent  at  this  juncture 
as  to  what  jNIouillard  is  doing.  Why  wdth  the  Wrights  suing 
on  a  combination  of  wing  warping  and  steering,  he  does  not 
open  up  on  them  on  the  wing  warping  device  upon  which  their 
alleged   improvement  is  based? 

Although  American  aviators  have  achieved  signal  triumphs 
in  aviation,  the  art  has  been  almost  wholly  developed  abroad. 
According  to  Augustus  Post  in  The  World's  Work,  July,  1911, 
the  number  of  licensed  aviators  in  the  leading  countries  was : 

France,  339;  Germany,  43;  England,  39;  Italy,  27;  Belgium, 
24;  United  States,  18;  and  Austria,  18. 

The  interest  in  aviation  abroad  has  no  counterpart  in  Amer- 
ica. The  reason  is  not  difficult  to  state.  The  grab-all  tactics 
of  the  Wrights  is  one  of  the  reasons.  The  other  is  the  "show- 
me"  spirit  of  American  business  men.  Though  it  rarely  occurs 
to  the  layman,  aviation  is  a  highly  expensive  matter,  an  aero- 
plane being  worth  from  $3,000  to  $10,000.  It  takes  money  to 
make  the  aviation  mare  go,  and  the  American  business  man  has 
not  taken  the  enthusiastic  interest  in  aviation  and  has  not 
offered  the  numerous  prizes  that  French  men  of  business  have 
devoted  to  aviation.  The  "show-me"  spirit,  the  American  busi- 
ness man's  cynical  tight-wadism  has  killed  aviation  in  the  bud. 

The  patriotic  support  and  interest  accorded  Count  Zeppelin 
has  struck  no  answering  chord  in  America.  No  American 
Zeppelin  has  been  evolved.  If  he  ever  existed  in  embryo  he  has 
probably  starved  to  death  trying  to  get  business  men  interested. 
After  the  destruction  of  a  Zeppelin's  airship,  near  the  conclu- 


180  THE  PKICE  OF  INEFFICIENCY 

sion  of  its  first  long  journey,  a  public  subscription  of  6,000,000 
marks  ($1,500,000)  was  made  within  two  weeks.  And  with  this 
money,  he  established  the  manufacture  of  airships  on  a  com- 
mercial basis.  Another  public  subscription,  of  $1,750,000,  was 
made  in  1912  for  the  national  aviation  fund.  Public  support  of 
the  airship  in  Germany  also  takes  the  form  of  traveling,  and  the 
Zeppelin  ships,  while  they  have  had  numerous  accidents,  have 
killed  no  one  since  the  start  of  passenger  service  in  1908.  The 
receipts  from  passenger  traffic  have  amounted  to  $122,000  with 
one  ship  traveling  over  15,000  miles  between  August  1,  1910,  and 
January  31,  1911,  carrying  5,000  passengers. 

Governmental  support  of  aviation,  too,  especially  in  Germany 
and  France,  is  a  great  stimulus  to  the  art,  an  aid  almost  wholly 
lacking  in  the  United  States.  It  is  reported  that  the  German 
government  will  shortly  create  the  office  of  Minister  of  Aerial 
Navigation  in  connection  with  the  Aviation  Department,  and  that 
the  first  minister  will  be  Count  Zeppelin. 

According  to  a  recent  report,  as  pointed  out  by  Brigadier 
General  James  Allen,  Chief  Signal  Officer,  in  his  annual  report 
(1911),  the  United  States,  although  the  first  nation  to  recognize 
officially  the  aeroplane  for  military  purposes,  has  been  surpassed 
by  German}^,  France,  Italy,  Austro-Hungary,  Russia,  Great 
Britain,  Belgium  and  Japan  in  aeronautical  equipment. 

The  only  aeronautical  equipment  which  the  United  States 
government  possesses  besides  three  small  captive  balloons,  is  one 
Wright  aeroplane  and  one  small  dirigible  balloon. 

"Germany  and  France  continue  to  lead  in  the  development  of 
aeronautics,  far  eclipsing  their  competitors.  According  to  fig- 
ures recently  published,  the  military  powers  have  the  following 
lighter  than  air  machines  or  dirigibles. 

"Germany,  14;  France,  7;  Italy,  3;  Austro-Hungary,  3; 
Russia,  3;  Great  Britain,  2;  Belgium,  2;  Japan,  1,  and  the 
United  States,  1. 

"The  figures  given  for  heavier  than  air  machines  are: 

"France,  36;  Germany,  5;  Great  Britain,  4;  Russia,  3;  Italy, 
2 ;  Austro-Hungary,  2 ;  Japan,  2 ;  Belgium,  2 ;  and  the  United 
States,  1." 

It  can  be  seen  that  the  United  States  foots  the  list,  being  be- 
hind Belgium  and  Japan. 

Considerable  detail  has  been  given  to  the  subject  of  aviation, 
being  a  recent  one  much  in  popular  interest,  and  showing  in  its 
various   phases  the   patent  mix-up,   the   lack   of  governmental 


INDUSTRIAL  HANDICAPS  I  181 

initiative  and  the  close  fisted  methods  of  American  business  men, 
a  striking  example  of  the  attitude  and  methods  of  America  in 
dealing  with  new  propositions.  The  history  of  aviation  is  the 
history  of  every  improvement  in  America ;  callous  indifference 
by  government  and  business  men,  hopeless  struggles  by  inven- 
tors, and  costly  litigation  of  a  most  interminable  character  to 
fix  the  status  of  patents  which  should  never  have  left  the  patent 
office.  The  thing  is  characteristic  of  America  to-day,  and  one 
of  the  principal  causes  for  the  condition  in  Avhich  the  country 
finds  itself  is  outlined  in  aviation.  Many  other  subjects  could 
be  taken  up,  in  which  our  engineers  realize  that  America  is  be- 
hind, as  far  behind  the  leaders  of  progress  as  she  is  in  aviation. 
It  is  time  for  America  to  w-ake  up.  She  has  rested  on  her  laurels 
long  enough. 


CHAPTER  XIII 
INDUSTRIAL  HANDICAPS  II 

The  grim  destiny  of  the  modern  workman — The  blight  of  standardization 
— The  uniformity  of  the  American — How  standardization  blocks  prog- 
ress— Unhealthy  condition  of  American  manufacturing  industries — 
How  the  worn  out  human  machine  is  scrapped — The  passing  of  the  old 
order — Fatuous  efforts  of  labor  unions  to  block  progress — The  new 
plan  of  common  sense  working,  or  so-called  "scientific  management" — 
How  it  may  be  utilized  to  cut  the  cost  of  living  in  two — False  views 
of  working  men — Incalculable  damage  done  by  misguided  restriction  of 
output — What  wage  earners  earn — An  average  of  $9  a  week — How  the 
flood  gates  of  prosperity  might  be  opened — The  deadly  virus  of  "what's 
the  use." — Regulation  of  employment  in  Germany — Daily  schedule — 
The  national  efficiency  movement. 

The  relations  between  capital  and  labor  in  America,  and  their 
relations  to  the  public,  amount  to  a  system  of  exploitation  and 
spoliation  at  every  turn  which  is  undermining  the  foundations 
of  prosperity  and  industry. 

Employer  and  employee  are  at  daggers'  points  and  their  in- 
terests become  diametrically  opposed.  The  organized  laborer 
becomes  a  distinct  species,  so  to  speak,  which  like  an  insect  out 
of  the  grub  stage,  is  a  full-sized  fly  never  to  grow  larger,  and 
never  having  been  smaller.  The  union  laborer  has  always  been 
a  laborer  and  he  never  expects  to  be  anything  else. 

The  old  order  in  which  a  man  had  the  possibility  and  incen- 
tive to  become  his  own  boss  and  an  emploj^er,  has  passed.  With 
the  growth  of  corporations,  the  consolidation  of  rival  manufac- 
tories, the  development  of  standardization  and  the  cost  of  ma- 
chinery, the  number  of  individuals  who  may  rise  to  positions 
of  responsibility  is  restricted  more  and  more.  Only  the  most 
brilliant  and  resourceful  can  hope  to  gain  a  foothold  sufficient 
to  command  the  capital  necessary  to  enter  into  competition  with 
other  masses  of  capital. 

The  workman  is  destined  more  and  more  to  remain  a  work- 
man, and  as  such,  his  former  ambition  to  be  a  good  workman 
in  the  hope  of  advancement  has  been  abandoned.     He  is  now 

182 


INDUSTRIAL  HANDICAPS  II  183 

out  to  get  all  he  can  right  away  and  do  as  little  work  for  it  as 
possible.  The  capitalistic  employer  is  out  to  get  as  much  out 
of  his  men  as  he  can  as  cheaply  as  he  can.  They  are  simply 
units  of  work.  So  many  hours  of  labor,  so  many  pounds  of  ma- 
terial, so  many  tons  of  coal  and  you  have  a  given  volume  of 
manufactures.  The  question  of  personality,  of  individuality,  is 
lost  sight  of.  All  idea  of  real  co-operation  is  gone.  The  em- 
ployer who  has  a  large  factory  cannot  know  his  men  by  name,  or 
even  their  faces.  They  are  numbers  in  the  industrial  game,  and 
though  sporadic  efforts  are  made  at  improving  the  condition 
of  the  employees,  it  is  always  with  the  idea  of  getting  more  work 
out  of  them  and  is  always  met  with  ingratitude  on  the  part  of 
the  emploj'ee. 

This  condition  of  affairs  is  typical  of  modern  conditions,  but 
in  America  it  reaches  its  worst  development.  This  is  largely 
due  to  standardization,  a  thing  that  for  the  sake  of  cheapness, 
cheapens  the  workman  and  in  addition  reduces  the  customer  to 
as  dead  a  level  of  sameness  as  is  possible. 

Americans  as  individuals  are  largely  standardized.  They 
wear  a  standard  hat,  a  standard  coat  and  standard  shoes.  The 
same  necktie  rules  from  j\Iaine  to  California  and  the  umbrella 
in  Chicago  is  a  twin  of  the  umbrella  in  New  Orleans  and  likely 
out  of  the  same  factory.  The  standardization  extends  into  the 
fiber  of  the  individual  and  what  he  does  and  is  and  thinks,  even. 
The  hat,  for  example,  has  a  standard  season,  the  straw  hat  ap- 
pearing promptly  on  June  15th  by  common  consent,  while  on 
September  15th  the  faithful  "Kelly"  must  be  put  aside  in  favor 
of  the  winter  hat. 

The  European,  who  regards  the  American  as  a  very  practical 
person,  is  vastly  mystified  by  the  sudden  abdication  of  the  straw 
hat  on  this  particular  date.  Although  worn  religiously  through 
rain  and  wind  which  may  come  in  the  early  part  of  the  month, 
it  must  not  be  seen  after  the  IStli  no  matter  how  warm  the 
weather  may  turn.  The  foreigner  is  never  able  to  fully  ex- 
plain it. 

Styles,  too,  are  standardized,  and  the  fashion  of  women's 
clothing,  though  changing  from  year  to  year,  is  standard  while 
it  rules. 

Standardization  as  it  affects  the  public  results  in  pronounced 
economies  in  the  regular  lines  of  merchandise.  The  vast  num- 
ber of  articles  of  a  single  pattern  turned  out,  whether  hats, 
chairs  or  hardware,  enables  the  cost  of  manufacture  to  be  reduced 


184  THE  PRICE  OF  INEFFICIENCY 

to  the  lowest  possible  figure.  The  cheapness  of  the  standard 
products  causes  their  use  by  everyone,  so  that  in  any  Ameri- 
can home,  much  the  same  furniture  will  be  found  as  in  any 
other.  The  carpets,  rugs  and  pictures  will  be  the  same  or  very 
nearly  so.  Thus  a  machine-made  atmosphere,  a  lack  of  origi- 
nality and  personality  and  a  lack  of  the  opportunity  for  de- 
veloping taste,  envelops  the  American  and  still  further  makes  of 
him  a  standardized  unit,  to  live  a  standardized  life  and  be 
buried  in  a  standardized  coffin  by  a  standardized  undertaker 
who  furnishes  a  standardized  funeral  for  $75.  Many  Ameri- 
cans are  hurried  to  their  graves  by  the  great  cost  of  articles 
which  they  may  require  outside  the  regular  "lines."  In  a 
hardware  store,  for  example,  if  an  article  is  not  "stocked"  the 
customer  is  regarded  in  a  very  frigid  manner.  Does  he  think 
himself  better  than  other  people,  or  is  he  only  cranky  that  the 
regular  lines  are  not  sufficient.  Perhaps  he  can  find  it  else- 
where but  it  is  not  likely.  In  any  event  he  is  informed  that 
the  store  does  not  "carry"  it,  and  that  it  must  be  made  up 
"special"  at  sixty  or  seventy  cents  an  hour  for  labor  for  an 
article  that,  if  it  were  standard,  would  be  turned  out  by  the 
thousands  per  hour  on  an  automatic  machine. 

The  principal  handicap  of  standardization,  however,  is  the 
great  difficulty  of  breaking  away  from  the  regular  line.  Im- 
provements, thus,  are  not  readily  introduced  and  the  antique 
lines  continue  to  be  forced  on  the  public.  One  example  is  in  the 
number  of  threads  on  a  bolt.  The  standard  threads  are  too 
coarse  for  most  purposes,  and  not  theoretically  correct  for  mod- 
ern materials.  Yet  no  new  standard  has  been  able  to  force  its 
way  on  the  market  to  any  extent,  though  a  certain  line  of  bolts 
for  automobiles  has  appeared. 

Another  example  in  the  line  of  machinery  illustrates  the 
strangle  hold  of  standardization  on  industry.  The  Electrical 
World  of  April  6,  1911,  in  an  editorial,  "A  Lesson  in  Econ- 
omy," referring  to  German  practice,  especially  to  certain  en- 
gines consuming  an  average  of  8.5  to  9.5  pounds  of  steam  per 
horse  power  per  hour,  which  is  near  the  record  of  steam  con- 
sumption of  seven  pounds  per  horse  power  per  hour,  states: 

"This  ought  to  bring  a  blush  to  the  cheeks  of  our  countrymen 
who  pride  themselves  on  their  progressiveness  in  engineering 
matters  and  in  manufacture.  We  have  been  preaching  super- 
heated steam  in  season  and  out  of  season  for  some  years  past, 
and  even  now  its  use  is  only  sporadic.    When  one  looks  at  the 


INDUSTRIAL  HANDICAPS  II  185 

record  of  the  German  units,  his  patriotic  fervor  for  American 
enterprise  receives  something  like  a  cold  douche.  When  one 
considers  that  there  are  many  thousands  of  these  units  in  use, 
varying  from  less  than  100  horse  power  up  to  600  horse  power, 
and  on  the  average  producing  power  on  less  than  ten  pounds 
of  steam  per  horse  power  per  hour,  he  can  only  wonder  in  a 
dazed  sort  of  way  how  our  engineers  and  manufacturers  have 
allowed  themselves  to  be  outdone  without  a  single  recorded 
effort  in  self-defense. 

"The  usual  excuse  is  made  that  these  engines  are  difficult  to 
operate,   but  if  ignorant  Chinamen,  Malays,   the  bushmen  of 
Africa  and  South  American  half-breeds  can  serve  as  combined 
engineer  and  fireman,  as  they  do  on  units  as  large  as  350  horse 
power,  our  own  'licensed'  engineers  should  find  no  trouble  in 
learning  to  do  so.     It  is  putting  it  mildly  to  say  that  machines 
of  this  class  are  capable  of  cutting  the  coal  consumption  and 
labor  in  two,  as  indeed  the  properly  planned,  superheated  plant 
should  do.     They  are  doing  the  work  which  in  this  country  is 
mostly  done  by  high-speed,  single-cylinder  engines  using  at  least 
30  pounds  of  steam  per  indicated  horse  power,  and  requiring 
the  services  of  two  men  instead  of  one.     We  hear  rumbling^  in 
the  distance,  a  deprecatory  chorus  about  upkeep  and  repairs, 
but  the  fact  is  that  the  continental  engineers  have  already  had 
a  good  deal  of  experience  with  superheated  steam  and  are  not 
in  the  least  afraid  of  it,  while  high  superheating  is  here  looked 
upon  with  the  distrust  that  is  born  of  ignorance.     If  anyone 
thinks  that  we  are  putting  the  case  too  strongly,  let  him  the 
next  time  he  wants  a  small  generating  unit  try  the  experiment 
of  asking  bids  on  a  superheated  steam  equipment  with  a  guar- 
antee of  ten  pounds  of  steam  per  brake  horse  power  hour.     It 
would  be  interesting  to  see  the  correspondence  which  would  fol- 
low the  proposition. 

''The  simple  fact  is  that  the  American  mania  for  so-called 
standardization  has  blinded  us  on  this  side  of  the  water  to^  what 
is  really  going  on  in  the  world.  Yet  the  continental  engineers 
who  are  working  along  that  line  lack  neither  skill  nor  experi- 
ence and  would  not  be  willing  to  send  equipment  of  this  kind 
to  the  ends  of  the  earth  to  be  run  by  untrained  men  unless  they 
were  prepared  to  stand  back  of  it.  American  manufacturers, 
we  may  be  proud  to  say,  can  do  as  good  work  as  any  in  the 
world,  and  American  engineers  are  fully  capable  of  holding  up 
their  end,  but  the  latter  cannot  move  until  the  former  tell  them 


186  THE  PRICE  OF  INEFFICIENCY 

to  go  ahead,  and  the  former  consistently  dodge  the  introduction 
of  unfamiliar  apparatus  until  they  are  clubbed  by  commercial 
pressure  into  the  path  of  progress.  They  move  along  the  path 
of  least  resistance  and  unfortunately  this  is  not  upon  an  up 
grade.  We  understand  fully  the  commercial  forces  that  tend 
toward  standardization  of  output,  and  we  do  not  undervalue 
the  convenience  of  this  standardization,  yet  the  time  comes 
when  a  break  has  to  be  made,  and  when  this  time  comes  it  is 
necessary  to  work  quickly.  In  our  judgment,  the  psychological 
moment  in  superheated  steam  work  is  near  at  hand.  Suppose, 
for  example,  the  not  impossible  case  of  the  abolition  of  the 
tariff  on  such  machinery  as  is  here  under  consideration  and  the 
subsequent  irruption  of  active  German  agencies.  How,  indeed, 
could  competition  be  met  if  the  tariff  were  even  materially 
lowered?  If  our  American  manufacturers  do  not  brace  up  and 
meet  the  situation  they  vnll  wake  up  some  fine  morning  to  find 
their  business  imperiled." 

It  is  undoubtedly  true,  as  the  Electrical  Woiid  states,  that 
American  manufacturers  do  not  want  to  appreciate  the  advan- 
tages outside  of  standardization.  The  American  manufacturer 
does  not  adapt  himself  to  the  needs  of  his  customers,  but  bends 
them  to  his  wares.  This  is  accomplished  by  force  of  advertising 
and  control  of  trade  channels,  but  it  is  a  policy  that  will  not 
work  abroad  and  the  American  manufacturer  loses  a  vast 
amount  of  export  trade  in  consequence.  The  Chinese,  for  ex- 
ample, it  is  said,  prefer  their  tacks  in  blue  boxes  of  a  certain 
shape.  This  sounds  like  nonsense  to  an  American  manufac- 
turer, and  he  sends  out  standard  shaped  boxes  with  red  labels 
and  Avonders  why  they  do  not  sell.  And  he  is  at  a  loss  to  under- 
stand why  his  exports  of  cutlery  are  small.  It  is  because  his 
few  standard  lines  of  knives  cannot  fill  the  requirements  of  the 
knives  for  the  various  trades  and  uses,  and  the  Gennan  factory 
which  turns  out  over  seven  thousand  different  kinds  of  knives 
gets  the  business. 

The  effects  of  standardization  on  workmen  is  one  of  the  black- 
est tragedies  of  industrial  life ;  the  tragedy  of  turning  men,  first 
into  machines,  and  then,  their  usefulness  interrupted  or  ended, 
of  setting  them  adrift,  unfit  and  unfitted  for  any  other  kind  of 
work. 

In  order  to  produce  cheaply,  large  quantities  must  be  manu- 
factured, which  involves  frequent  repetition  orf  the  same  opera- 
tions.    As  far  as  possible,  these  are  performed  by  machines,  but 


INDUSTRIAL  HANDICAPS  II  187 

every  machine,  however  automatic,  needs  some  human  attention, 
if  it  be  no  more  than  the  throwing  of  a  lever  at  certain  intei-vals. 

The  man  who  throws  the  lever  may  do  it  for  years.  All  he 
knows  is  to  throw  that  lever,  but  he  can  do  the  task  better  than 
anyone  else  in  the  factory.  Yet  he  can  do  nothing  else,  and 
when  the  time  comes  that  that  "line"  is  thrown  out,  the  prod- 
uct no  longer  salable,  and  the  machine  has  to  be  scrapped,  the 
man,  too,  is  scrapped— turned  out  to  look  for  another  job  in  his 
line  of  work,  which  no  longer  exists. 

The  monotony,  the  dearth  of  opportunity  to  learn  anything 
and  the  lack  of  incentive  to  initiative  created  by  automatic  ma- 
chinery enslaves  the  workman.  He  becomes  merely  a  cog  in  the 
machine.  His  wages  are  small  and  his  prospects  smaller.  He 
is  apt  to  turn  to  socialism,  but  he  turns  in  vain,  for  the  public, 
the  whole  public  demands  the  greatest  value  for  the  lowest  price, 
as  he  does  himself  for  the  goods  he  needs  for  his  own  use,  and 
standardization,  the  IMoloch  of  industry,  continues  to  demand 

its  victims. 

iModern  conditions  are  relentless  developing  efficiency.  In- 
efficiency, whether  in  men,  machinery  or  methods  is  being  elim- 
inated. '  The  man  who  can  do  one  thing  well  is  taking  the  place 
of  the  man  who  can  do  two  things  well,  simply  because,  having 
learned  one  thing,  he  went  to  work  at  it  and  gained  an  advan- 
tage while  the  other  was  learning  to  do  the  second  thing  well. 

And  inefficient  methods,  like  inefficient  machines  and  men, 
are  going  into  the  scrap  heap  just  as  rapidly.  The  old  order 
in  which  a  workman  after  learning  his  trade  became  a  foreman 
and  then  the  o\\Tier  of  a  shop,  is  obsolete.  Such  a  system,  while 
it  insured  a  thorough  understanding  of  all  details  by  the  head 
of  the  house,  produced  an  establishment  in  which  the  head,  after 
spending  years  learning  the  mechanical  end,  had  then  to  learn 
the  wholly  different  business  of  getting  business.  Such  estab- 
lishments have  been  superseded  by  those  in  which  a  competent 
workman  who  might  not  have  had  the  initiative  to  start  his  own 
business,  but  who  has  sufficient  ability  and  experience  to  be  a 
foreman,  is  placed  in  that  capacity,  while  the  proprietor  devotes 
himself  entirely  to  securing  orders,  thus  building  up  a  large 
business  before  the  master  workman  Avho  becomes  a  proprietor 
has  worked  his  way  up. 

The  old  method  of  apprenticeship  is  passing  too.  The  ap- 
prentice, after  several  years,  learned  his  trade  and  became  a 
journeyman,  capable  of  doing  a  large  variety  of  things,  know- 


188  THE  PRICE  OF  INEFFICIENCY 

ing,  in  fact,  all  branches  of  his  trade.  He  was  taught  by  the 
foreman  and  gained  his  experience  in  the  routine  of  the  shop. 
He  was  admirably  competent,  but  he  is  no  longer  in  evidence. 
Modern  methods  do  not  require  so  much  knowledge  and  such  a 
variety  of  skill  in  any  single  workman.  He  may  know  how  to 
do  fifty  things  well,  but  fifty  such  workmen  will  accomplish  no 
more  than  fifty  others,  each  of  whom  can  do  but  one  thing  well, 
while  each  of  the  latter  will  have  learned  his  specialty  in  a  few 
months  or  weeks,  perhaps,  instead  of  by  years  of  apprenticeship. 

The  foreman,  too,  finds  that  his  time  can  be  more  usefully  em- 
ployed than  in  teaching  apprentices.  He  demands  workmen 
already  trained  and  wants  to  be  interrupted  by  no  pupils. 

The  labor  unions,  too,  who  of  all  men  make  the  most  system- 
atic and  successful  efforts  to  stand  in  their  own  light,  as  well  as 
the  light  of  everyone  else,  restrict  the  number  of  apprentices, 
with  an  idea  of  producing  a  scarcity  of  skilled  workmen.  "With 
a  fatuity  so  complete  as  to  be  almost  admirable,  they  often  limit 
the  number  of  apprentices  in  certain  trades  to  one  for  each 
shop,  irrespective  of  the  number  of  men  working  in  the  shop. 
This  prevents  if  it  does  not  reduce  the  number  of  skilled  workers 
in  the  particular  trade.  The  wages  of  the  remainder  are  ac- 
cordingly enhanced  and  all  seems  well.  But  the  increased  wages 
attract  the  attention  of  young  men,  who  find,  however,  that  it 
is  a  very  difficult  trade  to  enter,  and  that  the  employers  would 
take  on  more  men  if  they  could  get  them.  The  action  of  the  in- 
creased wages  being  to  stimulate  the  interest  of  those  casting 
about  for  occupations,  and  there  being  a  demand  for  instruction 
in  that  line,  the  trade  school  is  produced.  Here  the  workman, 
by  specialized  methods,  can  learn  a  trade  in  a  few  months  that 
would  take  him  years  to  learn  as  an  apprentice,  as  he  is  taught 
systematically  and  does  not  pick  up  his  knowledge  at  random 
while  performing  minor  operations  of  manufacture  and  sweep- 
ing up  the  shop. 

The  trade  school  is  thus  a  cheaper  and  a  quicker  system  of 
instruction  than  the  old  method.  It  supplies  the  modern  fac- 
tory with  workers  who  have  learned  their  trades  at  small  ex- 
pense, and  who  can  afford  to  work  cheaply. 

The  action  of  the  unions  in  having  forced  an  increase  in  wages 
through  restriction  in  the  number  of  those  engaged  in  a  trade, 
causes  the  products  to  be  more  costly.  For  this  the  public  pays. 
But  capitalists,  seeking  opportunities  for  profit,  and  finding  out 
that  articles  of  that  class  are  selling  above  the  natural  price 


INDUSTRIAL  HANDICAPS  II  189 

are  anxious  to  enter  the  business.  The  trade  school  graduates 
in  that  line  cannot  enter  the  union  shops,  and  the  new  capital- 
ists cannot  get  union  men  to  man  the  new  factories  they  build. 
The  new  capital  and  the  new  labor  in  the  field  are  thus  thrown 
together,  and  the  new  factories  by  producing  the  same  articles 
at  a  lower  cost  undersell  the  union  factories,  and  the  unions  be- 
ing unwilling  to  make  concessions,  the  old  factories  are  ruined 
and  the  union  men  find  themselves  without  employment.  Their 
arbitrary  efforts  to  defeat  the  natural  laws  of  supply  and  de- 
mand are  thus  inevitably  defeated.  Labor  unions  have  been 
most  successful  in  the  newspaper  trades  of  typesetting  and 
manufacture,  for  the  reason  that  the  price  of  the  product  must 
remain  the  same  whatever  the  cost  of  labor,  while  the  proprie- 
tor recoups  himself  in  advertising  charges,  ultimately  paid  by 
the  public,  but  into  which  so  many  considerations  enter  that  the 
issue  of  the  cost  of  labor  can  never  be  definitely  met.  But 
wherever  competition  can  force  a  direct  issue,  the  labor  union 
is  always  defeated.  Wherever  a  cost  comparison  can  be  def- 
initely drawn,  the  labor  union  is  lost.  In  railroading  and 
similar  occupations  unions  are  successful.  They  have  at  all 
times  less  to  fear  from  the  competition  of  other  men  seeking 
work  than  they  have  of  the  public  seeking  cheaper  products. 

"Scientific  management,"  a  recent  and  high-sounding  name 
given  to  the  common-sense  policy  of  shop  efficiency,  is  also  bit- 
terly opposed  by  the  labor  unions.  It  amounts  to  a  conservation 
of  energy,  and  consists  in  reducing  the  number  and  diffi- 
culty of  the  bodily  movements  necessary  to  perform  any  given 
task. 

Thus  a  bricklayer,  by  standing  in  a  certain  position,  having 
his  bricks  placed  on  a  platform  at  a  selected  level  and  adopting 
a  certain  sequence  of  movements,  can  lay  three  times  as  many 
bricks  in  a  day  as  one  who  goes  at  his  task  in  the  usually  in- 
convenient manner,  and  not  be  any  more  fatigued  by  his  work 
if  as  much.  A  house  built  in  such  a  manner  is  much  less  ex- 
pensive than  by  the  old  methods,  and  were  all  houses  so  built, 
rents  would  be  greatly  reduced.  Yet  the  bricklayer  can  only 
see  the  point  that  by  producing  three  times  as  much  work,  he 
will  be  out  of  work  three  times  as  quickly,  and  he  therefore 
adopts  the  opposite  plan,  restricting  his  output  as  much  as  pos- 
sible. All  other  trades  follow  a  similar  policy,  for  except  on 
piece  work,  it  is  almost  the  universal  custom  among  working- 
men. 


190  THE  PRICE  OF  INEFFICIENCY 

If  as  a  body  they  understood  the  advantages  of  efficiency, 
with  the  consequent  cheapening  of  products,  and  doubled  their 
output,  an  enormous  effect  would  be  produced. 

If,  for  example,  a  million  coats  are  made  daily,  and  the 
makers  increased  their  product  to  two  million  without  any  ad- 
ditional cost  of  labor,  the  cost  of  coats  would  be  greatly  cheap- 
ened. But  if  carried  out,  practically  half  the  coat  makers  would 
be  thrown  out  of  work,  a  calamity  more  obvious  than  real,  as 
they  would  be  able  to  find  work  in  other  lines  while  the  coats 
of  all  would  be  much  cheaper,  including  their  own.  In  fact, 
for  each  w^orker,  the  consequent  cheapening  of  coats  for  the  re- 
mainder of  his  life  would  be  in  itself  more  than  compensation 
for  the  loss  of  his  position. 

The  same  process  applied  to  all  trades  would  throw  half  the 
workers  out  of  employment  sooner  or  later,  depending  on  the 
time  consumed  in  arriving  at  the  new  condition.  But  though 
half  the  workers  were  thrown  out  of  work,  the  cost  of  living 
would  be  reduced  to  half  its  former  figures,  so  that  the  con- 
dition of  the  whole  would  not  be  any  worse  while  the  necessity 
of  women  and  boys  under  eighteen  working  would  not  exist. 
The  whole  family  of  the  laborer  could  live  on  his  earnings,  in- 
stead of,  as  at  present,  having  to  work  to  make  up  the  industrial 
deficiency  caused  by  his  ignorant  attempt  to  get  the  best  of  his 
employer. 

The  labor  unionist,  however,  will  argue  that  if  the  worker 
doubles  his  output,  it  will  throw  half  of  his  fellow  workmen 
out  of  work  and  that  the  consequent  over  supply  of  labor  will 
result  in  the  unemployed  half  competing  with  the  employed 
half,  with  the  result  that  all  are  reemployed,  but  each  at  half 
the  former  wages  to  turn  out  twice  as  much  in  products  as 
before,  not  a  pleasant  prospect  for  the  laboring  man.  Even 
admitting  that  such  would  be  the  case,  the  cost  of  production 
would  by  this  process  be  reduced  to  one-fourth  the  present  cost, 
for  ultimately  labor  is  the  only  item  that  enters  into  the  cost 
of  any  article  of  commerce.  The  cost  of  living,  being  reduced 
thus  to  one-fourth  its  previous  figure,  the  worker  working  for 
half  his  former  salary  would  be  twice  as  well  off  as  at  present, 
for  his  reduced  salary  would  buy  twice  as  much  as  it  does  now. 
He  would  be  twice  as  well  off  for  the  simple  reason  that  he 
would  be  doing  twice  as  much  work.  The  laborer  cannot,  con- 
sidered as  a  body,  divest  himself  of  the  fruits  of  his  toil  any 
more  than  he  can  permanently  obtain  a  greater  compensation 


INDUSTRIAL  HANDICAPS  II  191 

than  that  to  which  he  is  entitled  by  natural  laws,  no  matter 
what  scheme  or  device  he  employs. 

Consider  on  the  other  hand  that  the  labor  unionist  were  to 
be  able  to  obtain  double  their  present  wages  for  doing  half  as 
much  work.  The  cost  of  all  products  would  be  quadrupled  im- 
mediately, but  the  wages  of  the  worker  being  only  doubled,  he 
would  be  in  a  position  only  half  as  advantageous  as  at  present. 
Some  such  process  as  this  has  taken  place  in  the  last  generation 
throughout  the  world.  The  workingman  has  become  filled  with 
false  ideas  as  to  his  rights  and  privileges  and  what  his  labor 
entitles  him  to,  and  with  everyone  else,  he  is  to-day  reaping  the 
bitter  harvest.  Wealth  is  nothing  but  accumulated  work  and 
the  more  work  that  the  individual  can  do,  the  richer  will  be  the 
world.  By  the  not  very  great  addition  to  work  of  increasing 
its  value  a  dollar  a  week,  the  wage  earners  of  the  country  in 
twelve  months  w^ould  produce  value  equivalent  to  the  entire 
fortunes  of  Morgan,  Carnegie,  Rockefeller  and  a  half  a  dozen 
other  of  the  richest  men  in  the  country,  and  give  such  an  im- 
petus to  prosperity  that  hard  times  would  be  a  thing  of  the 
past  for  years. 

No  worker  working  for  himself  ever  restricts  his  output.  But 
the  worker  imagines  that  in  working  for  his  employer  he  is 
working  for  someone  else.  Such  is  not  the  case.  The  public 
is  composed  of  the  public,  not  of  strange  gods  or  wealth  de- 
vouring ogres,  and  work  is  always  wealth.  The  worker's  living 
expenses  are  certain,  and  more  or  less  fixed.  If  he  works  twice 
as  much  he  produces  twice  as  much  value.  It  goes  somewhere. 
Into  the  pockets  of  capital,  the  laborer  thinks,  but  this  is  not 
the  case.  As  little  popular  sympathy  as  it  arouses,  competition 
among  dollars  for  jobs  is  just  as  keen  as  among  workers.  Cap- 
ital quickly  flows  into  new  and  profitable  enterprises  and  deserts 
old  ones.  If  a  moving  picture  theater  makes  money,  a  dozen 
others  spring  up  to  cut  down  the  profits  of  the  first.  If  a 
foundry  or  a  factory  in  a  certain  line  is  very  profitable,  there 
is  a  rush  to  get  into  that  business.  Money  is  subject  to  the  laws 
of  supply  and  demand  just  as  labor  is.  Everyone  wants  money, 
but  few  demand  it  so  strongly  as  to  pay  100%'  interest.  In  fact 
6%  is  about  the  ordinary  wages  of  money.  The  more  money 
there  is,  the  lower  the  rate  of  interest.  Capital  thus  measures 
its  own  return  by  the  amount  of  it  in  existence,  the  more  capital 
the  less  return,  just  as  labor  is  measured,  the  more  laborers,  the 
lower  the  wage. 


192  THE  PKICE  OF  INEFFICIENCY 

The  worker  who  is  apparently  making  his  employer  richer  by 
working  twice  as  hard,  is  in  reality  working  for  himself,  for 
although  the  employer  may  temporarily  become  richer  as  an  in- 
dividual, it  gives  him  money  which  he  must  invest  and  throw 
into  competition  with  money  invested  in  other  businesses  or  in 
his  own.  If  he  enlarges  his  plant,  the  worker  is  surer  of  em- 
ployment. If  some  other  manufacturer  from  some  other  field 
invades  the  field,  the  worker  has  a  choice  of  employers,  he  is  in 
fact  competed  for  by  the  very  wealth  he  has  created  in  his  own 
increased  efforts.  The  enormous  mass  of  fresh  capital  produced 
by  a  new  point  of  view  of  the  worker  would  in  competing  with 
existing  capital  reduce  the  cost  of  necessities.  The  wage  earner 
would  thus  be  deriving  the  benefit,  since  his  wages  though  not 
increased  would  have  an  increased  purchasing  power. 

Capital  has  certain  limits  of  profit,  just  as  labor  has.  Each 
takes  its  natural  proportion  in  accordance  with  the  relative 
amounts  of  each  in  existence.  Thus  the  worker,  by  more  effect- 
ive efforts,  when  he  increases  the  amount  of  money  in  other 
peoples'  pockets,  is  improving  his  own  condition  by  creating  new 
purchasing  power  for  his  products,  and  is  increasing  his  wages 
through  reducing  the  relative  returns  to  capital  caused  by  his 
own  efforts  in  bringing  more  capital  into  existence.  He  be- 
comes vastly  more  valuable  to  himself,  to  his  employer  and  to 
the  world  than  in  his  previous  condition. 

Yet  practically  throughout  the  world,  especially  in  English- 
speaking  countries,  the  worker  restricts  his  output.  The  new 
system  of  "scientific  management"  is  violently  opposed,  yet  it 
involves  no  more  fatigue  than  present  methods  while  producing 
much  greater  results.  What  it  amounts  to  is  a  study  of  the 
bodily  movements  with  a  view  to  eliminating  those  which  are 
superfluous  or  awkward,  so  that  a  worker  at  the  end  of  a  day 
has  made  no  greater  number  of  movements  than  ordinarily,  and 
has  expended  no  more  strength,  but  his  strength  and  his  move- 
ments have  been  productive  ones.  Indeed,  owing  to  the  waste 
motions  being  eliminated,  the  amount  of  work  done  is  often  less. 
Even  the  housekeeper  can  introduce  a  little  ''scientific  manage- 
ment" in  the  kitchen  by  the  erection  of  a  new  shelf  to  save  steps, 
by  sweeping  with  a  certain  motion  or  by  allowing  the  dishes  to 
remain  in  hot  water  for  a  time  before  washing  them.  Scien- 
tific management  is  merely  common  sense  applied  to  the  daily 
task.  The  vast  amount  of  wealth  that  dies  still  born  in  the  fac- 
tories of  the  world  every  day  is  almost  incalculable.     In  the 


INDUSTRIAL  HANDICAPS  II  193 

United  States  there  are  7,017,138  wage  earners  in  factories, 
according  to  the  1908  governmental  report,  ' '  Earnings  of  AVage- 
Earners. " 

The  census  of  manufacturers  of  1905  reported  216,262  estab- 
lishments, of  which  19,679  reported  no  wage  earners  in  employ- 
ment, leaving  196,583  to  be  investigated  in  connection  with  the 
report  on  weekly  earnings.  The  returns  from  72,880  of  the  es- 
tablishments were  so  defective  or  unsatisfactory  that  they  could 
not  be  used.  Of  the  remaining  123,703,  or  62.9%  of  the  whole 
number  having  wage  earners,  the  reports  enabled  the  prepara- 
tion of  most  interesting  deductions. 

The  inquiry  called  for  the  segregation  of  wage  earners  ac- 
cording to  groups  of  actual  earnings,  and  not  rates  of  pay ;  and 
therefore  the  distribution  gives  the  actual  numbers  that  earned 
the  specified  amounts  during  the  week  covered  by  the  report. 
The  terms  "wages"  and  "earnings"  are  frequently  used 
synonomously.  Earnings  and  not  rates  of  wages,  either  actual 
or  other,  are  given  in  the  report.  The  totals  include  piece  work- 
ers, and  cover  all  branches  of  employment  in  the  manufacturing 
industries  of  the  country,  exclusive  of  the  office  force. 

Of  the  3,297,819  wage  earners  covered  by  the  investigation, 
2,619,053,  or  79%,  were  men;  588,599,  or  17.9%,  were  women; 
and  90,167,  or  2.7%,  were  children. 

The  pay  rolls  of  the  123,703  establishments  for  the  week  cov- 
ered amounted  to  $33,185,791,  and  of  this,  men  received' $29,- 
240,287,  or  88.1%;  women,  $3,633,481,  or  11%;  and  children, 
$312,023  or  nine-tenths  of  1%. 

As  each  establishment  was  requested  to  report  the  actual 
number  employed  during  the  week  and  the  actual  amount  paid 
that  number,  it  should  be  safe  to  use  the  above  totals  to  com- 
pute the  average  earnings  for  the  week.  They  give  $10.06  as 
the  average  weekly  earnings  for  all  classes  of  wage  earners  dur- 
ing the  selected  week,  and  $11.16,  $6.17  and  $3.46  as  the  aver- 
ages for  men,  women  and  children  respectively. 

The  classification  shows  the  concentration  of  men  at  the  higher 
and  of  women  and  children  at  the  lower  weekly  earnings.  More 
than  one-half  (55.5%)  of  all  the  wage  earners  received  $9  and 
over  per  week.  Two-thirds  (66.6%)  of  the  men  received  $9 
and  over  for  the  week,  while  only  one-seventh  (14.1%)  of  the 
women  were  paid  at  this  rate.  The  children  receiving  $9  and 
over  were  so  few  that  they  are  included  in  the  general  tabula- 
tions with  those  receiving  $8  and  over. 


194  THE  PRICE  OP  INEFFICIENCY 

Tlie  greatest  number  of  wage  earners,  namely,  464,875,  make 
from  $12  to  $15  per  week,  while  some  132,064  make  less  than 
$3  per  week. 

From  a  consideration  of  other  tables  given  in  this  report,  it 
is  estimated  that  about  3,000,000  wage-earners  are  so  employed 
that  by  the  adoption  of  intensive  work,  they  could  greatly  in- 
crease their  output.  The  other  wage  earners  are  so  employed 
that  their  output  could  either  be  but  slightly  increased  or  not 
at  all.  But  the  output  of  the  3,000,000  could  readily  be  in- 
creased 50%,  and  at  the  average  wage  of  all  factory  workers, 
approximating  $9  a  week,  this  would  mean  a  saving  of  $2,340,000 
a  day  or  the  vast  total,  figuring  300  working  days  in  the  year, 
of  $702,000,000.  That  is,  there  is  that  much  money  wasted  in 
misdirected  efforts  every  year,  by  far  a  larger  item  than  any 
that  has  been  made  in  any  computation  in  reference  to  the  con- 
servation of  the  country's  resources. 

The  census  of  1900  showed  29,287,070  persons,  ten  years  of 
age  and  over,  as  engaged  in  gainful  occupations,  and  assuming 
that  the  average  weekly  wage  is  $6,  and  omitting  the  3,000,000 
factory  workers  already  referred  to,  the  application  of  intensive 
work  to  the  extent  of  only  10%,  would  mean  an  increase 
of  sixty  cents  a  week  for  26,000,000  workers,  or  $2,704,000  a 
day. 

In  whatever  employment  the  worker  may  be  engaged,  an  in- 
crease of  10%  efficiency  may  be  obtained,  and  in  most  cases 
very  easily  obtained  without  any  additional  effort  at  all.  In 
three  hundred  working  days,  the  10%  increase  would  mean 
$811,200,000,  which  with  the  factory  increase  mentioned,  makes 
a  total  of  $1,513,200,000. 

This  vast  sum  that  might  be  added  to  the  wealth  of  the  coun- 
try annually,  would  be  like  quarts  of  blood  transfused  into  the 
veins  of  an  ana?mie ;  where  there  is  now  financial  lassitude,  ac- 
tivity and  vigor  would  result ;  where  credits  are  restricted  and 
capital  wanting,  there  would  be  energy  and  prosperity.  The 
attitude  of  antagonism,  the  fear  that  someone  else  will  become 
too  prosperous,  jealousy  of  the  success  of  others  and  particu- 
larly of  those  who  are  in  the  position  of  employers,  brings  mis- 
fortune for  all. 

The  man  who  devotes  himself  to  schemes  for  preventing  others 
from  making  money,  will  never  have  the  time  to  make  much 
for  himself. 

Almost  as  bad  as  this  grudging  of  effort  in  its  costliness  to 


INDUSTRIAL  PIANDICAPS  II  195 

humanity,  is  the  time  lost  in  strikes,  the  most  direct  expression 
of  the  differences  between  capital  and  labor. 

The  waste  of  grudging  effort,  or  as  is  often  the  case,  simply 
the  inefficient  or  "  what 's-the-use "  failure  of  the  worker  to  put 
forth  his  best  effort,  lies  in  the  feeling  that  no  one  else  will  do 
so.     There  is  an  utter  lack  of  co-operation  and  concerted  effort. 

A  group  of  laborers  tugging  at  a  timber  will  not  move  it 
luiless  there  is  a  concerted  effort.  It  is  then  moved  with  little 
trouble. 

A  method  of  introducing  a  concerted  effort  in  intensive  work 
needs  to  be  devised.  If  all  workers  knew^  that  on  a  certain  day 
all  other  workers  were  going  to  put  forth  extra  efforts,  it  would 
have  the  effect  of  contagious  enthusiasm,  and  even  the  most  in- 
dolent would  be  "on  the  job"  on  such  a  day.  What  the  coun- 
try needs  thus,  is  a  tuning  up  or  period  of  forcing,  a  time  dur- 
ing which  prodigious  efforts  are  to  be  made;  after  which  the 
greater  effort  would  become  a  habit,  and  the  previous  method, 
a  remembrance  as  of  the  dreaded  tasks  of  childhood. 

Perhaps  the  only  time  the  w^hole  country  has  engaged  in  a 
concerted  and  prearranged  effort,  was  the  cessation  of  all  activ- 
ity for  one  minute  at  the  time  of  the  funeral  of  President  Mc- 
Kinley,  when  all  transportation  and  work  was  stopped.  This 
had  a  great  psychological  effect. 

A  concerted  effort  of  this  kind  to  initiate  a  new  attitude  to- 
wards the  day's  work  could  not  fail  to  have  an  enormous  effect. 

While  such  concerted  action  might  prove  an  immediate  ex- 
pedient and  a  starting  point,  a  more  permanent  change  of 
the  point  of  view  is  necessary.  There  must  be  systematic  train- 
ing. The  right  direction  must  be  given  and  the  sense  of  re- 
sponsibility to  humanity  made  a  part  of  the  technical  training 
of  all. 

Each  one  should  be  taught  to  do  his  part  for  the  sake  of  the 
rest  of  the  world  as  well  as  for  himself.  The  spirit  of  mutual 
helpfulness  on  the  part  of  all  concerned  should  take  the  place 
of  animosity  and  jealousy. 

One  of  the  secrets  of  German  success  lies  in  the  mutual  help- 
fulness mutually  exercised  by  the  government,  the  employers 
and  the  employees. 

Mr.  W.  H.  Dooley  in  the  Atlantic  Monthlij,  May,  1911,  de- 
scribing "German  and  American  Methods  of  Production," 
says: 

"The  German  government  recognizes  the  duty,  and  exercises 


196  THE  PRICE  OF  INEFFICIENCY 

the  right,  of  regulating  industries  in  the  interest  of  the  em- 
ployed ;  but  in  doing  so,  it  is  careful  to  keep  in  view  the  general 
industrial  interests.  The  German  laws  are  consequently  in 
many  respects  much  less  stringent  than  ours,  which  seem  to 
have  been  enacted  under  spasmodic  influences  without  any 
guiding  principle.  This  may  be  explained  by  the  fact  that  the 
German  government  has  been  obliged  to  foster  industries,  and, 
in  order  to  do  this  effectually,  must  strike  in  its  legislation  a 
happy  medium  between  the  claim  of  the  employed  for  protec- 
tion, and  that  of  the  community  at  large  for  the  promotion  of 
industrial  enterprise. 

"The  most  stringent  regulations  passed  by  the  government 
are  those  affecting  children  and  women,  and  it  is  in  this  respect 
that  the  state  has  clearly  in  view  the  interests  of  the  community 
as  represented  by  its  workers.  The  total  number  of  children 
under  fourteen  years  employed  for  special  reasons  and  exempt 
by  law  in  the  manufacturing  industries  in  Germany  is  about 
1630.  These  children  are  between  thirteen  and  fourteen,  and 
the  hours  of  employment  are  restricted  to  six,  with  half  an  hour 
interval  for  meals.  Between  fourteen  and  sixteen  they  may 
work  not  more  than  ten  hours  but  they  must  have  an  hour's 
pause  at  midday,  and  half  an  hour  both  in  the  forenoon  and  af- 
ternoon, unless  their  working  day  is  not  more  than  eight  hours. 
No  continuous  period  exceeds  four  hours.  During  the  rest 
periods,  any  participation  in  work  is  forbidden,  even  remaining 
in  the  work  room  is  allowed  only  when  their  o\^^l  department 
of  the  work  is  brought  to  a  complete  standstill. 

"When  past  eighteen,  they  cease  to  be  youthful  workers,  and 
are  under  no  special  regulations  except  that  all  under  twenty- 
one  must  be  provided  with  a  'work-book,'  or  register,  contain- 
ing name,  age,  birthplace,  nature  of  employment,  date  of  en- 
gagement, discharge  and  other  particulars.  All  boys  under 
eighteen  are  obliged  to  attend  a  continuation  school  for  nine  or 
ten  hours  during  the  week  where  they  receive  instruction  in  the 
technical  knowledge  of  their  trade  and  religious  instruction 
from  their  own  clergj^man.  This  time  is  taken  out  of  the  regu- 
lar day-work  without  loss  of  pay.  In  a  number  of  larger  engi- 
neering and  machine  shops,  the  writer  saw  no  youthful  workers. 

"Workmen  may  be  fined  to  the  extent  of  one-half  of  their 
earnings,  except  in  the  cases  of  acts  against  fellow  workmen,  of 
offenses  against  morality,  or  of  those  against  regulations,  main- 
tenance of  order  and  of  security,  when  fines  may  be  imposed 


INDUSTRIAL  HANDICAPS  II  197 

to  the  full  extent  of  the  earnings.  All  fines  must  be  applied 
to  the  benefit  of  the  workers,  and  generally  go  to  the  sick  fund, 
but  this  does  not  affect  the  right  of  employees  to  obtain  com- 
pensation for  damages.  All  particulars  of  fines  imposed  must 
be  entered  in  a  book,  which  is  open  to  inspection  by  a  govern- 
ment officer. 

"Every  industrial  establishment  must  have  a  set  of  rules 
hung  up  in  an  accessible  place  in  each  department,  stating  the 
hours  of  work,  with  the  regular  interval  for  meals,  the  time  and 
manner  of  paying  wages,  the  length  of  notice  terminating  em- 
ployment, and  the  conditions  under  which  notice  is  unnecessary ; 
also  particulars  of  punishment,  including  fines,  and  the  objects 
to  which  they  will  be  applied. 

''Punishments  which  wound  self-respect  or  offend  morality 
are  inadmissible.  These  rules  are  equally  binding  on  employer 
and  employed,  but  before  they  are  issued,  opportunity  must  be 
given  to  adult  workers  to  express  their  views,  and  the  rules  to 
w^hich  objections  are  made  must  be  submitted  within  three  days 
of  issue  to  the  factory  inspector,  who  may  order  amendments  if 
they  are  not  in  accordance  with  the  law  or  with  special  regula- 
tions. Punishments  not  provided  for  in  the  rules  cannot  be 
imposed,  nor  can  other  grounds  of  dismissal  be  included  in  the 
contract. 

"It  is  a  rare  thing  for  a  firm  to  have  any  difference  with  its 
workmen.  Indeed,  I  was  definitely  informed  by  one  firm  that 
there  had  been  only  five  cases  of  dispute  in  nine  years,  and  these 
did  not  come  from  the  worlmien  as  a  whole,  but  were  cases  of 
individual  complaint.  They  have  in  Germany  an  institution 
corresponding  to  the  Conseil  des  Prud  'hommes,  in  France,  which 
they  call  Gewerbe  Gerichte,  to  which  are  brought  all  cases  of 
disputes  of  employees  and  employers.  The  average  number  of 
cases  tried  by  this  bureau  never  exceeds  five  hundred  a  year. 
The  bureau  consists  of  five  or  three  people.  The  government 
appoints  a  chairman  who  is  a  lawyer,  and  there  are  representa- 
tives of  the  employer  and  the  employee  also  appointed  by  the 
government.  Sometimes  two  are  selected  instead  of  one.  Their 
decision  is  not  final,  as  is  that  of  the  arbitration  board  in  this 
country.  If  a  workman  or  employer  does  not  accept  this  de- 
cision, it  is  binding  for  only  two  weeks.  Then  the  workman 
may  leave,  or  the  employer  may  discharge  him.  To  give  an 
illustration:  One  of  the  workmen  in  an  engineering  firm  thinks 
he  should  receive  four  marks  more  a  week  in  wages.     He  goes 


198  THE  PRICE  OP  INEFFICIENCY 

to  the  firm  and  makes  the  demand.  They  refuse  him.  He  ap- 
peals to  the  Gewerbe  Gerichte.  The  Gewerbe  Gerichte  says, 
'No,  do  not  pay  it.'  The  workman  can  leave  at  the  end  of  two 
weeks'  notice;  or,  if  the  decision  is  given  in  favor  of  the  work- 
man, the  firm  is  obliged  to  pay  him  the  increase  for  at  least  two 
weeks,  and  then  they  may  give  him  a  fortnight's  notice  to  quit." 

It  may  be  noted  here  that  employers  seldom  discharge  em- 
ployees after  appeals  to  the  Gewerbe  Gerichte.  Indeed,  they 
avoid  as  much  as  possible  having  employees  appeal  to  it.  To 
disregard  its  decisions  in  effect  gives  the  firm  a  bad  reputation, 
and  to  be  before  it  is  somewhat  similar  in  damaging  effect  to 
the  summoning  of  a  lawyer  before  the  Bar  Association  in  New 
York. 

Mr.  Dooley  continues: 

"Notice  of  termination  of  employment  is  usually  a  fort- 
night, but  it  may  be  dispensed  wdth  on  the  part  of  an  employer 
on  the  following  grounds :  false  representation,  theft,  or  other 
criminal  acts;  leaving  work  without  permission,  or  refusing  to 
fulfill  the  contract;  carrying  fire  or  lights  about,  contrary  to 
orders;  acts  of  violence  or  gross  abuse  directed  against  the  em- 
ployer, his  representatives  or  family;  willful  damage;  inducing 
member  of  an  employer's  family  or  his  representatives,  or  fel- 
low workmen,  to  behave  in  a  manner  contrary  to  law  or  moral- 
ity; inability  to  continue  work;  or  an  alarming  disease.  Notice 
may  be  dispensed  with  by  the  workers  on  corresponding 
grounds;  also  for  non-payment  of  wages  in  the  prescribed  man- 
ner; neglect  to  provide  sufficient  work  for  piece  workers;  or 
some  danger  to  life  and  health  in  the  employment  which  could 
not  be  inferred  from  the  contract. 

"The  rate  of  wages  is  not  included  in  these  rules.  The  ex- 
istence of  such  a  code,  legally  binding  on  employers  and  em- 
ployed, is  a  characteristically  German  method  of  doing  business ; 
it  is  in  accordance  with  that  respect  for  law  and  order  which  is 
such  a  marked  feature  of  German  life,  and  contributes  materi- 
ally, no  doubt,  to  the  smooth  working  of  German  industries. 
The  rights  and  obligations  of  'work-giver'  and  'work-taker,'  to 
use  the  excellent  German  terms,  are  publicly  defined  and  guar- 
anteed by  law.  This  conduces  to  tranquillity,  and  makes  at- 
tempts at  individual  bullying  or  vague  talk  about  'rights'  pal- 
pably futile." 

The  training  thus  given  the  German  worker  is  such  that  he 
respects  his  work  and  is  willing  and  anxious  to  do  it  thoroughly 


INDUSTRIAL  HANDICAPS  II  199 

and  for  its  own  sake.  This  is  the  foundation  of  efficiency. 
When  a  task  is  well  done,  no  one  can  profit  by  it  as  much  as  the 
man  who  does  it ;  none  can  take  from  him  the  sense  of  pride  and 
satisfaction  which  it  creates,  and  though  the  employer  profits 
apparently  more  in  a  financial  way,  in  the  end  natural  forces 
w'ork  themselves  out  in  such  a  way  that  each  receives  the  com- 
pensation to  which  he  is  entitled  under  the  circumstances.  The 
channels  of  iudustr}^  may  be  fouled  and  obstructed  at  certain 
places  and  at  certain  times,  but  the  level  of  recompense  for  the 
worker  and  the  employer  is  justly  reached  in  time. 

A  national  society  has  recently  been  organized  in  the  United 
States,  composed  principally  of  four  groups:  men  of  affairs, 
members  of  university  faculties,  specialists  in  accounting  and 
efficiency  engineers,  the  purpose  of  which  is  to  promote  effi- 
ciency. The  names  of  the  organizers  are  among  the  most  promi- 
nent in  the  country  in  their  respective  groups.  The  movement 
for  the  formation  of  such  a  national  society  seems  to  have 
come  at  the  moment  of  maximum  effect.  Nothing  ever  at- 
tempted in  this  direction  (and  there  have  been  several  attempts 
during  the  past  ten  or  fifteen  years)  took  such  instant  and  un- 
mistakable hold  on  the  enthusiasm  of  those  whose  co-operation 
was  invited. 

The  Engineering  Magazine  writes: 

"Probably  the  catholicity  of  view  and  interpretation  that 
mark  the  new  society  has  much  to  do  wdth  its  evident  power  to 
enlist  support.  It  has  very  clear  ideals  to  advance,  but  no 
special  system  to  exploit.  It  recognizes  the  financier,  the  com- 
mercial manager,  the  accountant,  the  educator,  the  engineer,  as 
co-ordinated  powers,  each  potent  in  his  own  field,  to  originate 
and  direct  effort  toward  conservatism,  toward  reduction  of  the 
preventable  waste  of  money,  time,  energy,  of  physical  and  human 
resources,  that  now  burdens  our  struggle  toward  greater  pros- 
perity. It  accepts  any  conscientious  discipleship  and  works 
contributing  to  this  purpose,  and  places  all  emphasis  on  prin- 
ciples of  faith  and  none  on  points  of  ritual. 

"Better  concepts  of  efficiency  are  indeed  sorely  needed 
everywhere.  Attention  has  been  focused  upon  inefficiency  in 
railroad  operation  and  thence  reflected  upon  inefficiency  in  man- 
ufacturing, although  in  every  probability  efficiency  is  far  higher 
in  either  of  these  fields  than  in  departments  that  hold  themselves 
much  above  commerce  and  transportation — the  law  for  example. 

"Consider   the    McNamara   trial   as    an    object   lesson.     The 


200  THE  PRICE  OF  INEFFICIENCY 

prospective  jury  held  in  jail,  and  the  panel  generally  shadowed 
and  investigated  by  detectives;  counsel  taking  days  to  examine 
one  talesman,  announcement  made  that  each  side  will  take  thirty 
minutes  to  sum  up,  not  the  case,  but  the  question  of  a  single 
juror's  acceptability,  and  all  ending  in  nothing;  six  weeks  esti- 
mated to  be  necessary  to  filling  the  jury  box  alone. 

"Louis  Carroll,  collaborating  with  Gilbert  and  Sullivan, 
could  have  imagined  nothing  more  frantic. 

"When  the  larger  fraction  of  our  legislature  is  drawn  from 
professions  in  which  the  great  fundamental  efficiency  principle 
of  common  sense  can  be  grotesquely  ignored,  it  is  not  surprising 
that  much  of  our  legislation  should  lack  this  and  other  princi- 
ples of  efficiency;  should  uphold  mistaken  ideals,  fail  to  enforce 
discipline  and  violate  the  fair  deal.  And  when  the  car  of  jus- 
tice takes  to  the  mire,  the  wheels  of  industry  also  are  clogged. 
Perhaps  the  attempt  to  enforce  the  Sherman  law  may  prove  its 
reducHo  ad  absiirdum;  but  the  present  spectacle  is  disturbing. 
The  attempt  to  remedy  specific  wrongs  by  general  legislation 
leads  to  results  wholly  unforeseen  and  chaotic.  We  fulminate 
against  forms  of  organization  because  they  permit  wrongs  to  be 
done,  and  let  actual  wrongdoing  go  unredressed  and  unpun- 
ished. Everj'where  we  grapple  mth  forms  and  miss  the  sub- 
stance. Surely  some  great  organized  movement  for  efficient 
common  sense  is  fully  due! 

"In  marked  contrast  to  the  confusion  wrought  by  the  lawyer- 
politician  in  attempting  to  regulate  industrial  affairs,  there  are 
beginning  to  appear,  here  and  there,  clean-cut  exhibitions  of 
wholesome  ideals  and  efficient  performance  in  political  office 
where  the  influence  of  the  engineer  and  the  experienced  indus- 
trial manager  has  had  opportunity  to  make  itself  felt.  • 

"Visitors  to  the  Budget  show  in  New  York  city  (not  generally 
thought  of  as  having  a  model  city  government)  are  strongly 
impressed  with  the  extent  to  which  the  standards  and  purposes 
of  conscientious  and  economical  performances  are  being  upheld 
by  many  of  the  men  in  the  engineering  departments;  and  the 
administration  of  the  affairs  of  a  large  city  is  increasingly  a 
matter  for  engineers  to  control.  From  Chicago  comes  a  note 
that  the  Civil  Service  Commission  has  ordered  examinations 
for  positions  of  'expert  on  system  and  organization'  and  'ex- 
aminer of  efficiency'  and  that  to  secure  technical  men  of  the 
highest  grade  to  fill  the  positions,  local  residence  has  been 
waived.     The  methods  appearing  in  some  of  the  work  done  under 


INDUSTRIAL  HANDICAPS  II  201 

the  state  government  of  "Wisconsin  are  described  bj^  a  competent 
engineering  critic  as  inspiring.  And  in  Federal  affairs,  a  new 
concept  of  the  relations  between  government  and  industry  is 
thus  impressively  voiced  by  Congressman  William  C.  Redfield : 

"  '  If  the  American  makers  of  goods  would  practice  the  modern 
idea  of  scientific  management,  or  greatest  possible  efficiency,  no 
tariff  wall  would  be  needed  to  protect  them  from  competition. 
This  principle  we  may  safely  lay  down ;  manufacturers  must 
go  to  the  limit  of  self-help  before  they  can  ask  the  public  to 
tax  itself  to  keep  them.  No  tariff  can  righteously  cover  costs 
arising  from  mistakes  in  management,  errors  in  location,  bad 
equipment,  faulty  methods  or  neglect  to  adopt  the  most  modern 
system  of  cost  keeping  and  supervision.'  This  represents  the 
best  genius  of  constructive  political  effort. 

"When  such  leaven  is  working  in  municipal,  state  and  national 
governments,  it  gives  courage  and  hope  for  the  ultimate  leaven- 
ing of  the  whole  mass. ' ' 

''Scientific  management"  is  a  fine  phrase  of  recent  origin  and 
quite  unknown  in  Germany  where  the  results  so  accomplished  are 
merely  regarded  as  the  results  of  common  sense  practice  and  are 
not  considered  worthy  of  being  so  brass  banded.  Motion  study, 
a  phase  of  the  same  subject,  is  likewise  a  matter  of  course  in 
Germany  and  the  author  recalls  that  during  his  extended  shop 
practice  in  the  early  90 's  with  a  concern  employing  some  14,000 
men,  he  was  taught  w^hat  is  now  discovered  to  be  motion  study, 
by  a  superintendent  who  had  been  practicing  it  for  forty  years. 

Quite  as  innocently  the  author  had  occasion,  in  this  country, 
some  years  since  (1904)  to  recommend  certain  changes  in  the 
operation  of  plants,  effecting  in  one  instance  a  saving  of  $50,000 
and  in  another  a  saving  of  over  $200,000  a  year,  without  realiz- 
ing that  proceedings  of  such  kind  would  come  to  be  known  as 
"scientific  management,"  and  not  only  so  known  but  regarded 
as  a  newly  made  discovery,  and  trade  marked  with  the  names  of 
so  called  originators. 

Many  other  methods  now  in  vogue  in  Germany  are  doubtless 
similarly  destined  to  "discovery"  here. 


CHAPTER  XIV 
HOW  TO  SUPPLANT  THE  TRUSTS 

A   NEW  METHOD  OF   REVIVING  SMALL  INDUSTRIES. 

How  the  trusts  have  ground  out  the  small  manufacturer — The  cumber- 
some but  crushino-  system  of  the  trust — How  it  may  be  opposed  by  ag- 
gregations of  individuals — A  new  field  for  bankers  in  establishing  com- 
munal manufacturing  plants — Solving  the  problem  of  working  capital 
— Advantages  in  extending  and  obtaining  credit — Cheapening  the  cost 
of  supplies — Furnishing  tlie  sinews  of  competition — Convenience  to  the 
public — Advantages  in  purchase  of  coal  and  raw  material — Special 
facilities  and  testing  apparatus — Quick  and  efficient  service  rendered 
to  the  public  by  comnumal  manufacturers — Stimulating  effect  on  work- 
men— Better  facilities  for  odd  jobs — Saving  in  transportation  charges 
and  delays  in  local  deliveries — Communal  bookkeeping — Incentive  of 
the  banking  interest — Certainty  of  financial  success — Cumulative  ef- 
fect of  advertising — Elimination  of  the  middleman — Example  of  auto- 
mobile manufacturing  on  a  communal  system — Superiority  of  product 
over  that  of  a  trust  owned  plant — Impossibilities  of  the  trusts  with- 
standing the  competition  of  communal  groups — Great  value  of  good 
will  to  the  communal  manufacturer — Beginnings  of  the  system — How 
small  cities  could  establish  such  a  system — iloderate  investments  re- 
quired— Importance  of  competent  engineering — Great  advantage  to  the 
city  seeking  to  promote  its  growth — Psychological  effect  on  workmen 
— The  yeast  in  the  industrial  loaf — The  small  manufacturer  as  a  neces- 
sity in  the  scheme  of  industrial  organization — The  true  selling  price 
of  every  article — The  greatest  of  industrial  forces. 

In  the  battles  of  modern  industry,  the  small  competitor  is  con- 
stantly being  vanquished  by  the  larger  rival.  The  latter  has 
the  superior  resources  and  the  small  manufacturers  gradually 
disappear,  unable  to  compete  in  efficiency  with  the  larger  ones, 
and  a  condition  finally  results  in  which  the  activities  of  an  in- 
dustry are  carried  on  by  a  few  large  manufacturers  and  a  num- 
ber of  isolated,  struggling  repair  shops. 

The  large  factory,  however,  works  under  certain  disadvan- 
tages. Its  organization  is  necessarily  cumbersome  and  much  red 
tape  is  involved.  It  cannot  serve  its  customers  as  expeditiously 
and  it  confines  itself  to  certain  lines  of  goods  and  makes  no  at- 
tempt to  supply  goods  for  which  there  is  only  a  limited  demand. 

202 


HOW  TO  SUPPLANT  THE  TRUSTS  203 

It  suffers  all  the  evils  of  standardization,  which  are  referred 
to  in  the  previous  chapter,  and  it  is  usually  rigid  in  operation  and 
slow  to  adopt  new  ideas. 

The  small  factory  serves  the  customer  in  much  better  ways 
than  the  large  one.  His  patronage  is  more  necessary  to  its  ex- 
istence and  it  is  far  more  adaptable  to  his  wants. 

Yet  in  spite  of  its  many  admirable  features,  the  small  factory, 
lacking  specialization,  capital  and  equipment,  cannot  compete 
in  cheapness  Math  the  larger  units,  and  is  constantly  being 
driven    out  of  existence. 

A  system  whereby  the  small  factory  may  bo  able  to  get  into 
the  field  again  is  being  attempted  in  Germany  on  a  small  scale, 
here  and  there,  while  the  same  principle  is  being  applied  in 
New  York  to  a  limited  extent  in  warehousing  and  factory  build- 
ings. It  has  already  attracted  considerable  attention  and  if 
developed  along  the  right  lines  may  very  quickly  become  a 
Daniel  in  the  industrial  battle,  slaying  the  Goliath  of  the  trusts, 
and  a  means  of  quickening  again  industrial  activity  through  the 
revival  of  competition  in  effective  form. 

It  is  a  system  especially  inviting  and  adaptable  to  small  cities 
desiring  to  increase  their  prosperity.  They  will  be  the  most 
likelj'  backers  for  it,  and  will  find  in  it  a  highly  effective 
weapon. 

The  system  is  in  principle  a  communism  of  facilities  on  the 
part  of  the  small  manufacturers,  preserving  competition  in  the 
market.  By  a  lumping  together  of  themselves  as  manufacturers 
into  producing  groups,  while  maintaining  their  identity  as  in- 
dividuals in  their  relations  to  the  public,  they  can  compete  suc- 
cessfully with  the  larger  concerns  and  utilize  in  addition  the 
great  force  of  individual  initiative. 

Under  ordinary  circumstances,  the  plan  needs  to  be  started 
by  a  capitalist,  banker  or  financier,  whose  purpose  would  be 
to  obtain  a  secure  investment  for  large  sums  of  money  in  what 
may  be  considered  a  highly  equipped  real  estate  development, 
rather  than  as  an  investment  in  a  manufacturing  concern. 

A  suitable  district  should  be  selected,  having  accessibility  to 
supplies  of  labor,  convenience  of  transportation  for  w^orkmen 
and  customers,  and,  of  the  greatest  importance,  proper  rail- 
road and  water  terminals.  At  such  a  location,  an  enormous 
factory  building  or  series  of  buildings  should  be  constructed, 
designed  especially  to  accommodate  the  industries  intended  to 
be  quartered  there.     The  buildings  should  be  subdivided  to  suit 


204  THE  PKICE  OF  INEFFICIENCY 

the  needs  of  the  individual  manufacturers,  each  taking  the  space 
and  facilities  best  suited  to  his  work. 

The  purpose  of  the  banldng  interests  is  best  accomplished  by 
the  organization  of  an  operating  company,  in  which  the  tenant 
manufacturers  have  a  share  and  a  vote,  and  the  duty  of  which 
is  to  co-operate  with  the  manufacturers  in  the  administration  of 
the  plant,  to  unify  them  as  a  purchasing  unit,  and  to  act  toward 
them  as  a  supplier  of  working  capital,  the  greatest  need  of  the 
small  manufacturer. 

If  several  hundred  small  manufacturers  are  thus  grouped 
together,  the  system  of  communism  thus  indicated  would  ad- 
minister their  affairs  in  a  highly  economical  and  efficient  manner. 

Among  the  advantages,  the  follo^^ang  are  the  principal: 

The  unlimited  capital  and  credit  back  of  the  group  would 
enable  the  individuals  to  secure  the  equipment  necessary  to 
manufacture  their  products  on  long  term  payments,  thus  giving 
them  the  means  of  adding  to  their  manufacturing  capacity  as 
rapidly  as  their  business  expanded,  and  not  limiting  their  ca- 
pacity, as  it  is  at  present  with  small  manufacturers,  to  the 
amount  of  new  equipment  that  can  be  purchased  either  outright 
or  on  ruinously  high  installment  rates,  out  of  profits  as  realized. 
Equipment  would  include  machinery,  machine  tools,  dies,  lathes, 
furnaces  and  all  kinds  of  labor  saving  machinery  and  devices. 

The  operating  company  would  supply  the  necessary  working 
capital  at  fair  rates  of  interest,  advancing  worldng  capital  on 
the  basis  of  orders  in  hand  as  security.  "Working  capital  is  one 
of  the  great  needs  of  the  small  manufacturer.  On  the  receipt 
of  the  order,  he  needs  money  to  buy  materials  to  be  made  up. 
During  manufacture  he  needs  money  to  pay  his  workmen,  and 
after  completion  of  the  goods  he  must  meet  freight  and  delivery 
charges  and  wait  for  from  thirty  to  ninety  days  to  be  paid  by 
his  customer,  who  in  turn  is  waiting  for  the  ultimate  consumer 
to  take  the  goods  off  the  shelves. 

The  small  manufacturer's  hands  are  too  often  tied  by  lack  of 
working  capital  to  tide  him  through  the  manufacturing  period. 
Under  such  a  plan  as  this,  feeling  secure  in  his  supply  of  work- 
ing capital,  he  is  able  to  make  closer  prices,  promise  earlier  de- 
liveries and  prompt  deliveries,  and  offer  discounts  and  credits 
which  enable  him  to  meet  the  competition  of  the  larger  factories 
on  their  own  ground. 

The  operating  company  would  have  a  credit  department  for 
advising  the  individual  manufacturers  as  to  the  reliability  of 


HOW  TO  SUPPLANT  THE  TRUSTS  205 

their  customers,  and  this  undertaken  for  the  hundreds  of  manu- 
facturers would  result  in  a  much  more  economical  system  of 
ascertaining  credit  than  could  be  put  in  force  by  the  manufac- 
turers acting  individually. 

In  the  collection  of  accounts  also,  the  group  would  be  able  to 
exercise  a  considerable  power,  since  the  credit  of  a  merchant 
being  bad  with  one  manufacturer,  it  would  consequently  be  bad 
with  all,  and  a  merchant  thus  purchasing  various  different  kinds 
of  products  from  the  several  manufacturers  of  the  group,  would 
be  compelled  to  keep  his  credit  good  with  the  group  to  obtain 
the  superior  advantages  which  they  would  have  to  offer  him. 

In  the  purchase  of  supplies,  the  group  buying  for  all  its  mem- 
bers would  be  able  to  command  the  lowest  market  prices,  and 
obtain  the  longest  credits,  where  credits  were  desired,  while  the 
individuals  would  be  free  to  purchase  what  they  chose  in  the 
name  of  the  group,  enabling  them  to  exercise  their  own  individ- 
ual abilities  in  purchasing,  backed  by  the  responsibility  which 
would  accrue  to  them  as  members  of  the  group. 

It  will  be  seen  that  in  its  fundamental  financial  features,  the 
group  would  be  of  the  greatest  possible  service  to  its  manufac- 
turers, and  would  place  them  on  a  basis  whereby  they  could 
compete  with  any  factory  or  trust,  however  great  or  powerful. 

In  its  internal  relations,  the  group  would  not  be  less  effective. 
It  would  have  a  staff  of  well  trained  business  men,  engineers 
and  master  mechanics,  who  would  be  competent  to  advise  the 
individual  manufacturers  as  to  the  best  methods  and  machinery 
to  be  employed  in  their  respective  industries.  The  small  manu- 
facturer would  thus  be  aft'orded  the  same  technical  advantages 
now  enjoyed  alone  by  the  greater  units. 

This  would  result  in  the  best  possible  arrangement  of  ma- 
chinery and  facilities  for  handling,  manufacturing  and  deliver- 
ing the  product,  and  would  ensure  efficiency  in  operation  and 
production,  while  the  business  men  as  administrators  would  be 
of  assistance  in  arranging  credits  and  promoting  the  business 
of  the  various  concerns. 

A  plant  thus  fitted  for  numerous  small  manufacturers,  would 
have  for  them  many  advantages  over  isolated  locations,  and 
they  would  accordingly  remove  to  it.  It  would  also  be  particu- 
larly convenient  for  the  public,  who  would  not  have  to  go  from 
place  to  place  in  search  of  the  articles  they  desired.  The  man- 
ufacturers so  grouped  would  thus  have  a  considerable  advantage 


206  THE  PRICE  OF  INEFFICIENCY 

over  manufacturers  whose  locations  were  scattered  throughout 
the  rest  of  the  city  in  being  more  accessible. 

The  buildings  being  planned  for  the  purposes  intended,  bet- 
ter light  and  air  would  be  obtained  than  in  isolated  plants,  with 
a  consequently  greater  and  superior  output  on  the  part  of  the 
workmen.  The  janitor  service  would  be  effected  with  the  great- 
est economy  and  waste  materials  utilized  to  the  fullest  extent. 

Through  the  purchase  of  coal  for  a  single  central  station, 
supplying  light,  heat  and  power  to  the  whole  plant,  great  econo- 
mies would  be  put  in  force.  The  isolated  manufacturer  buying 
light,  heat  and  power  as  he  does,  must  pay  a  profit  to  each  of 
the  supplying  concerns,  while  the  grouped  manufacturers  would 
receive  their  light,  heat  and  power  at  cost.  In  this  particular, 
at  present,  the  isolated  small  manufacturer  suffers  a  great  hard- 
ship, since  the  electrical  and  steam  concerns  supply  his  larger 
rival  at  an  extremely  low  cost,  to  prevent  them  from  installing 
their  own  plants.  This  not  only  gives  the  large  manufacturer 
an  enormous  advantage,  amounting  in  many  cases  to  as  much 
as  his  rent,  but  it  also  kills  at  the  outset  the  manufacture  of 
electrical  machinery  for  isolated  power  plants. 

The  purchase  of  raw  materials  in  quantities  by  the  group 
and  distribution  to  the  units  at  the  wholesale  price,  would  also 
prove  a  great  economy. 

Tool  rooms  in  common  would  be  provided,  saving  each  shop 
the  heavy  cost  of  capital  tied  up  in  tools  seldom  used.  Ma- 
chine tools  and  machinery  of  such  a  nature  as  to  be  but  seldom 
used  by  any  of  the  individuals,  but  occasionally  very  necessary, 
would  be  provided  in  a  central  shop  for  the  use  of  all,  at  an 
equitable  hourly  charge,  saving  the  units  the  investment  in  such 
tools  which  is  ordinarily  required. 

In  this  shop  could  also  be  included  testing  machines  for  test- 
ing materials,  a  class  of  machineiy  very  seldom  found  in  manu- 
facturing plants,  and  not  at  all  in  small  shops  where  most 
needed. 

If  somewhat  enlarged,  such  a  department  could  take  in  out- 
side work,  as  there  are  but  a  very  limited  number  of  such  plants 
throughout  the  country,  and  they  are  mostly  connected  with  tech- 
nical colleges,  which  do  not  take  commercial  work,  needing  their 
facilities  for  their  own  researches. 

Occasional  work  of  great  accuracy  could  thus  be  undertaken 
by  shops  which  would  ordinarily  be  unable  to  attempt  it. 

A  portion  of  the  plant  would  be  taken  up  by  fully  equipped 


HOW  TO  SUPPLANT  THE  TRUSTS  207 

shops  to  be  rented  to  the  manufacturers  ready  for  operation 
for  limited  periods  in  cases  where  the  manufacturers  did  not 
wash  to  purchase  machinery  outright  or  on  the  installment  plan, 
and  such  shops  could  be  utilized  by  inventors  perfecting  their 
inventions,  to  the  great  benefit  of  all  industries. 

In  the  matter  of  repairs,  both  in  the  equipment  of  the  shop 
itself  and  in  outside  work,  the  facilities  of  the  group  would  en- 
able the  best  service  to  be  rendered  at  the  least  expense  and 
delay.  The  public  would  find  among  a  number  of  small  manu- 
facturers thus,  means  of  having  odd  jobs  done  more  quickly  and 
satisfactorily  than  in  the  case  of  large  manufacturers.  Their 
varying  wants  could  be  much  more  readily  served  and  new 
business  developed  more  rapidly  than  under  present  condi- 
tions. 

For  the  workman,  the  conditions  would  be  highly  stimulating 
and  beneficial.  Work  in  a  small  shop  is  always  of  greater  va- 
riety and  of  a  nature  requiring  greater  initiative  on  the  part  of 
the  workman  than  in  a  large  shop.  In  the  latter  the  workman 
is  ordinarily  confined  to  one  particular  operation.  For  the  ap- 
prentice, the  small  shop  is  much  more  desirable,  as  he  learns 
his  trade  more  quickly  and  thoroughly  than  in  a  large  shop. 

The  plant  would  have  a  labor  bureau,  enabling  the  workman 
laid  off  in  one  shop  to  be  shifted  to  another,  and  thus  being 
assured  of  practically  permanent  positions  with  working  con- 
ditions of  the  best,  workmen  could  be  had  at  lower  wages  than 
in  isolated  plants,  or  at  a  given  wage,  a  more  efficient  class  of 
men  could  be  obtained. 

Such  a  plant  would  contain  reading  rooms  with  trade  journals 
and  technical  books ;  recitation  rooms  and  lunch  rooms,  giving 
workmen  means  of  relaxation  and  enabling  them  to  return  to 
work  with  fresh  energy. 

In  cases  of  accidents  which  would  be  less  frequent,  owing  to 
precautions  enforced  by  the  group,  medical  attendance  would 
be  at  hand,  and  every  aid  given  the  worker,  while  the  units  of 
the  group  would  be  better  protected  through  insurance  systems 
against  the  financial  cost  of  accidents. 

The  business  routine  of  the  plant  would  be  performed  by  the 
group,  and  bookkeeping  and  the  details  of  routing  and  shipping 
attended  to  by  a  few  clerks  for  all.  A  manufacturer  finishing 
a  product  could  turn  it  over  to  the  department  of  shipping, 
without  having  to  bother  with  looking  up  the  best  freight  rates 
and  tariffs.     The  plant  enjoying  the  best  obtainable  shipping 


208  THE  PRICE  OF  INEFFICIENCY 

facilities  and  being  practically  a  terminal  freight  station  itself, 
could  forward  its  products  with  the  least  trouble  and  expense. 

Loading  would  be  on  cars,  right  at  the  doors  of  the  manufac- 
turers. The  group  would  also  have  a  delivery  system  of  its  own 
for  local  deliveries,  serving  in  addition  to  its  terminal  facilities. 
A  most  important  saving  would  thus  be  effected,  for  the  ex- 
pense and  trouble  which  is  experienced  by  small  business  men 
in  making  deliveries  when  they  do  not  maintain  a  delivery  serv- 
ice of  their  own,  amounts  to  nothing  less  than  a  species  of  ex- 
tortion, and  is  not  only  a  drain  on  profits,  but  a  source  of  con- 
tinual annoyance  and  friction  to  all  concerned. 

The  shipping  being  attended  to  by  the  group,  its  system  of 
bookkeeping  could  readily  be  extended  to  include  the  opera- 
tions of  the  individual  manufacturers  with  the  public.  Thus 
the  employment  of  individual  bookkeepers  by  each  would  be 
avoided,  and  an  important  saving  of  clerical  help  accomplished. 

The  knowledge  which  the  group  would  thus  have  of  the  opera- 
tions of  the  individuals,  would  serve  to  protect  both,  and  as  the 
purpose  of  the  group  would  be  to  promote  the  welfare  of  the 
group  units,  no  inimical  action  would  arise  out  of  such  an 
arrangement.  It  would  be  somewhat  similar  to  the  accounts 
which  a  bank  keeps  for  its  customers. 

Indeed  the  whole  relation  of  the  group  to  the  individuals 
would  be  rather  in  the  nature  of  the  relations  of  a  bank  to 
business  men.  The  group  would  be  essentially  the  banking  or 
moneyed  interest,  rather  than  an  association  of  the  individuals 
in  the  form  of  a  trade  syndicate.  The  banking  interest  would 
supply  the  capital,  build  the  plant,  provide  the  means  of  ob- 
taining the  equipment,  and  such  additional  service  as  bookkeep- 
ing, expert  advice,  credit  arrangements,  shipping,  and  the  like, 
as  supplemental  features.  It  would  be,  in  a  way,  a  hotel  for 
industries  in  which  the  units  instead  of  only  getting  a  bare  room 
as  in  the  case  of  isolated  plants  at  present,  would  get  the  space 
and  equipment  and  such  services  as  have  been  indicated,  just  as 
the  hotel  guest  receives  much  more  when  he  rents  a  room  in  a 
hotel  than  he  would  in  renting  an  unfurnished  room. 

Among  the  beneficial  activities  of  the  group  would  be  a  de- 
partment of  information  and  publicity,  preparing  reports  of 
progress  and  results  of  work  for  the  benefit  of  the  units;  com- 
piling tables  of  market  prices,  and  keeping  in  touch  with  tech- 
nical developments  and  referring  them  to  the  units  most  inter- 
ested in  such  matters. 


HOW  TO  SUPPLANT  THE  TKUSTS  209 

In  advertising,  the  products  of  all  the  manufacturers  would 
be  advertised  together  as  being  manufactured  in  such  a  group. 
This  would  add  a  trade  mark  value  of  importance  to  the  prod- 
ucts of  each  manufacturer,  besides  effecting  a  saving  in  the 
rates  and  placing  of  the  advertisements.  Instances  of  com- 
munal advertising  of  this  general  character  are  seen  in  the 
cases  of  the  manufacturers  of  a  certain  town  who  club  together 
and  make  the  name  of  the  town  a  general  trade  mark  for  goods  of 
a  certain  character.  The  name  Grand  Rapids  is  thus  identified 
with  furniture  and  Oneida  with  underwear.  Communal  adver- 
tising has  a  very  marked  effect  and  is  a  highly  valuable  form  of 
trade  mark. 

A  communal  group  of  manufacturers  could  accomplish  great 
results  in  the  lines  in  which  several  kinds  of  products  are  manu- 
factured by  specialists  but  not  sold  to  the  public  direct,  being 
combined  by  a  final  manufacturer  into  the  product  which  the 
public  purchases,  such  as  the  manufacture  of  pianos  and  auto- 
mobiles. 

The  purchaser  of- an  automobile,  for  example,  gets  a  motor 
made  by  one  factory,  a  magneto  made  by  another,  horns,  lamps, 
wheels,  shock  absorlDers,  radiator,  ball  bearings,  hood,  body, 
frame,  pumps,  etc.,  each  manufactured  by  a  specialist  and  as- 
sembled by  the  manufacturer  owner  of  the  trade  mark  name 
under  which  the  car  is  finally  sold.  Even  the  largest  of  the 
manufacturers  of  automobiles  secure  portions  of  the  mechanism 
or  equipment  of  their  cars  from  other  manufacturers.  They  thus 
add  these  trade  mark  values  to  their  own.  The  condition  has 
been  created,  partially  by  patents  but  more  by  the  concentration 
of  effort  in  perfecting  the  separate  devices. 

In  a  communal  group  of  manufacturers  in  which  all  the  parts 
of  the  automobile  were  manufactured  by  members  of  the  group, 
and  the  car  sold  as  assembled. by  the  group,  the  highest  degree 
of  efficiency  would  be  achieved.  As  compared  with  a  large  fac- 
tor}^ making  practically  the  whole  machine,  the  communal  sys- 
tem would  amount  to  separate  factories  for  making  the  parts, 
w^hich  would  correspond  to  the  separate  departments  of  a  large 
plant.  The  individual  shop  owners,  having  so  much  more  at 
stake  than  the  department  foremen  of  the  large  plant,  and  be- 
ing backed  by  equal  capital  and  having  equal  facilities,  would 
turn  out  a  better  car  at  a  lower  price.  They  need  not  devote 
their  whole  output  to  the  car,  but  could  sell  the  surplus  to  other 
manufacturers,  and  they  would  have  every  incentive  to  supply 


210  THE  PRICE  OF  INEFFICIENCY 

their  own  car  with  the  best  and  cheapest  of  material,  as  in  the 
division  of  profits  of  sale,  they  would  participate  in  the  pro- 
portion that  the  cost  of  their  product  bore  to  the  cost  of  the 
car. 

No  trust  could  withstand  competition  of  this  sort,  for  the 
initiative  of  a  group  of  active  individuals  would  be  opposed  on 
equal  terms  to  the  inert  mass  of  the  large  corporation,  respond- 
ing sluggishly  to  conditions  and  being  poorly  or  inefficiently 
served  by  its  employees  from  top  to  bottom. 

The  communal  group  would  be  at  a  great  advantage  over 
outside  assemblying  manufacturers  working  in  isolated  plants 
and  drawing  their  parts  from  other  isolated  manufacturers,  in 
the  saving  of  freight  costs  and  other  charges,  as  well  as  by  being 
able  to  build  up  more  quickly  the  trade  mark  and  good  will 
value  which  would  from  the  sympathy  of  the  public  and  the 
excellence  of  the  communal  car,  so  much  more  readily  be  com- 
manded by  the  group.  In  the  purchase  of  supplies,  the  group 
would  cut  out  the  cost  of  the  midlemen,  and  in  the  establish- 
ment of  sales  agencies,  reduce  the  cost  of  selling.  In  the  saving 
in  overhead  charges,  such  as  fire  insurance,  depreciation,  interest 
and  sinking  fund,  office  expenses,  etc.,  the  communal  system 
with  one  plant,  would  possess  great  advantages  over  the  charges 
of  a  number  of  separate  plants. 

An  illustration  of  the  efficiency  of  the  communal  principle 
is  seen  in  some  of  the  large  department  stores  in  the  principal 
cities  of  the  country.  In  such  stores,  certain  counters  are 
rented  by  individuals  who  own  the  goods  on  the  shelves  and 
conduct  the  business,  just  as  if  the  aisles  were  streets  and  their 
own  counters  separate  stores.  The  store  as  a  whole  has  the 
advantage  of  individual  initiative  at  the  various  counters.  Such 
stores  are  of  the  most  successful  sort. 

The  principles  of  communal  manufacturing  are,  as  mentioned, 
being  carried  out  to  a  certain  extent  in  New  York  in  the  form 
of  factory  and  storage  buildings,  the  Bush  Terminals.  These 
buildings  offer  exceptional  facilities  in  light,  heat,  power,  con- 
venient construction  and  location  at  terminals,  thus  saving 
drayage  charges,  while  insurance  is  lessened  and  many  other 
advantages  obtained. 

It  has  even  been  proposed  that  New  York  city  should  take 
over  the  Bush  Terminal  buildings,  thus  following  the  example 
of  German  cities  in  their  ownership  of  improved  real  estate. 
This  would  be  a  form  of  municipal  activity  of  a  new  sort  for 


HOW  TO  SUPPLANT  THE  TRUSTS  211 

American  cities,  but  one  that  should  in  all  probability,  if  fol- 
lowed, prove  of  great  advantage. 

In  the  smaller  cities  particularly,  great  results  could  be  ac- 
complished by  the  promotion  of  communal  enterprises.  The 
city  furnishing  the  capital  and  site,  could  induce  manufacturers 
to  locate  there,  owing  to  the  superior  advantages  thus  to  be 
enjoyed.  At  present,  cities  often  offer  free  sites  and  freedom 
from  taxation  for  a  certain  period  to  induce  manufacturers  to 
locate  their  factories  with  them.  The  offer  of  communal  facil- 
ities and  the  use  of  capital  on  fair  terms,  if  it  were  a  system 
adopted  by  cities  generally  throughout  the  country,  would  pro- 
duce most  remarkable  effects,  as  numerous  new  manufactories 
fostered  in  this  manner  by  municipalities  would  be  able  to  com- 
pete with  and  eventually  break  up  the  trusts.  Such  a  plan 
could  be  put  in  operation  in  a  commission  governed  city  with 
little  trouble  and  in  such  a  city  an  efficient  administration  of 
it  could  be  expected. 

It  is  obvious  that  legal  measures  will  never  effect  much  change 
in  the  industrial  situation  as  it  exists.  The  trusts  must  be 
beaten  on  their  own  ground,  as  manufacturing  mechanisms.  In 
the  communal  plan,  the  much  vaunted  superiority  of  the  busi- 
ness methods  of  the  trust  could  be  met  and  overcome  by  the 
superior  initiative  and  efficiency  and  adaptability  of  the  com- 
munal manufacturers. 

Nor  does  the  plan  necessarily  involve  a  large  investment  to 
institute.  While  the  larger  the  number  of  factories  together, 
the  better  the  results  obtained,  a  communal  group  of  even  a 
dozen  or  twenty  manufacturers,  requiring  no  great  financial 
backing,  would  suffice  for  a  start  in  many  places.  Such  groups 
could  be  instituted  in  buildings  already  existing,  but  if  new 
buildings  were  erected,  they  should  be  designed  to  permit  en- 
largements on  a  w^ell  organized  scheme.  Here,  as  elsewhere  in 
the  system,  the  services  of  a  competent  engineer  would  be  of 
the  first  importance.  In  the  whole  design,  erection  and  opera- 
tion of  such  a  system,  the  competent  engineer  would  occupy  an 
indispensable  place.  Indeed  the  success  of  the  whole  undertak- 
ing would  depend  largely  on  the  w^ork  of  the  engineer  and  the 
ability  shown  in  properly  planning  and  organizing  the  propo- 
sition. 

It  may  be  asked  what  incentive  a  banker  would  have  in  ad- 
vancing large  sums  of  money  for  such  a  purpose,  when  -with  the 
same  capital  he  could  establish  a  large  plant  under  his  sole  con- 


212  THE  PKICE  OF  INEFFICIENCY 

trol  and  direction?  Certainly  the  return  would  be  greater  for 
the  large  plant  to  the  banker  than  for  the  communal  enterprise, 
where  the  profits  would  be  intended  to  go  to  the  individual 
manufacturers,  since  they  would  have  the  use  of  capital  at  reg- 
ular rates  of  interest.  It  is  not,  however,  invariably,  the  object 
of  the  banker  to  secure  the  gi^eatest  profit  out  of  invested  capital. 
Indeed,  it  is  a  well  known  law  of  finance  that  the  greater  the 
profit,  the  greater  the  risk,  while  the  lower  the  profit,  the  greater 
the  security.  The  banker,  putting  money  into  a  communal  en- 
terprise, would,  owing  to  the  number  of  individuals,  have  much 
greater  security  than  by  trusting  all  his  eggs  in  the  one  basket 
of  the  large  plant,  with  its  responsibilities  of  management. 
While  it  is  known  that  sooner  or  later  95%  of  all  men  in  busi- 
ness go  into  bankruptcy,  it  does  not  follow  that  95%  of  com- 
munal enterprises  would  fail,  indeed  there  is  no  reason  why  any 
should  fail,  for  while  the  individual  units  might  succumb  from 
time  to  time,  all  the  manufacturers  could  not,  in  the  nature  of 
things,  fail  simultaneously,  so  that  the  communal  group,  while 
its  units  would  change  from  time  to  time,  would  persist  indefi- 
nitely as  a  group. 

The  banker  would  thus  be  hazarding  his  capital  not  against 
one  business,  but  against  many,  and  in  numbers  there  is  financial 
security.  The  financing  of  such  an  enterprise  need  not  require 
any  great  body  of  active  capital,  that  is,  capital  at  hazard  and 
subject  to  loss.  After  the  purchase  of  the  land,  if  indeed  it 
were  not  donated  by  the  city,  it  could  be  mortgaged  for  enough 
to  supply  funds  for  the  buildings,  and  they  in  turn  mortgaged 
for  enough  to  get  money  for  equipment.  The  equipment,  be- 
ing placed  with  the  manufacturers,  who  would  in  turn  give  mort- 
gages, the  whole  enterprise  could  probably  be  organized  on  an 
equity  of  one-fourth,  that  is  three-quarters  of  the  money  would 
be  borrowed,  only  one-fourth  being  subject  to  loss.  The  estab- 
lishment by  a  city  of  such  an  enterprise  would  not  be  a  very 
serious  drain  on  its  finances,  and  the  credit  of  the  city  would 
ensure  its  success. 

It  is  a  plan  which  would  be  particularly  suitable  for  a  small 
city,  where  the  cost  of  power  is  usually  high  to  the  individual, 
and  supplies  and  other  costs,  except  rent,  greater  than  in  a 
larger  city.  One  active  and  public  spirited  citizen  in  each  city 
could  stir  the  matter  up  and  put  it  through,  and  a  hundred 
such  organizations  in  a  hundred  of  the  cities  of  the  country 
could  bring  about  enormous  changes  in  the  whole  organization 


HOW  TO  SUPPLANT  THE  TRUSTS  213 

of  society,  since  the  changes  the  communal  system  would  bring 
about  would  not  only  be  economic  but  psychological.  One  of 
the  chief  causes  of  industrial  discontent  now  is  that  the  large 
plants  have  crushed  the  smaller  ones  and  in  doing  so  have  taken 
away  from  the  workman  liis  last  hope  of  rising  in  the  world  to 
a  position  of  economic  independence.  The  best  that  he  can  ex- 
pect to  become  is  the  foreman  of  a  room  or  the  superintendent 
of  a  department.  While  under  former  conditions,  the  propor- 
tion of  men  who  could  rise  to  the  position  of  employers  was 
small,  as  indeed  it  must  remain  under  any  condition,  the  fact 
that  such  opportunities  existed,  placed  upon  the  workman  him- 
self the  burden  of  proving  that  he  was  competent.  Now,  how- 
ever, with  such  opportunities  closed,  even  the  most  incompetent 
can  claim  that  but  for  existing  conditions,  he  might  rise  and  no 
one  can  gainsay  his  assertion.  The  burden  of  pro-vang  his  own 
competency  has  thus  been  lifted  off  the  workman's  shoulders, 
and  his  discontent  increases,  while  the  industrial  combinations 
are  charged  with  the  failure  of  each  and  every  one  of  their 
employees  to  reach  a  commanding  position.  The  number  of 
those  whose  rise  is  checked  by  the  trust  is  necessarily  small  but 
the  yeast  is  taken  out  of  the  industrial  loaf,  and  a  sodden  and 
discontented  mass  remains. 

In  any  state  of  society,  the  interest  of  the  public  is  the  supe- 
rior interest.  The  fact  that  trusts  have  managed  to  drive  out 
the  smaller  manufacturer  does  not  prove  their  superiority  as  an 
industrial  expedient;  that  is,  that  they  can  serve  the  public 
best.  When  they  are  under  proper  control,  they  may  supply  a 
given  product  at  a  lower  selling  price  to  the  consumer  than  can 
the  small  manufacturer,  but  the  selling  price  is  not  the  only 
index  of  the  cost  to  society  of  an  article.  Every  article  has  a 
natural  or  normal  cost.'  Time  and  labor  are  consumed  to  pro- 
duce it,  which'  should  be  properly  measured  by  the  selling  price 
to  the  actual  consumer,  but  when  this  selling  price  is  too  low, 
the'  cost  of  the  article  is  made  up  at  the  other  end  of  the  line 
in  the  blighting  effect  on  the  lives  of  the  workers.  This  affects 
society  as  a^whole  so  that  ultimately  the  entire  body  of  pur- 
chasers pays  the  full  ultimate  cost  of  every  article,  no  matter 
how  low  its  immediate  cost  may  be  placed  to  the  consumer,  by 
the  oppression  of  workmen  and  sha\dng  of  prices.  "When  part 
of  the  cost  comes  out  of  the  lives  of  the  workmen,  their  purchas- 
ing power 5.is  reduced  accordingly  for  other  articles.  When  part 
of  the  na'tural  cost   comes  6ut  of  the  manufacturer's  pocket 


214  THE  PRICE  OF  INEFFICIENCY 

through  the  exigencies  of  competition,  he  finally  goes  broke  and 
thro^vs  a  number  of  workmen  out  of  employment,  the  natural 
cost  being  made  up  in  the  waste  inflicted  on  them.  The  proper 
method  of  reducing  the  selling  cost  is  by  efficient  methods  of 
manufacture  and  improved  machinery,  and  not  by  crushing 
out  any  class  of  society. 

The  small  manufacturer  is  an  economic  necessity.  A  system 
which  removes  such  a  class  from  the  social  organization  is  at 
fault;  it  is  a  stairway  from  which  the  intermediate  steps  have 
been  removed,  a  stairway  upon  which  progress  is  possible  only 
for  giants. 

The  restoration  of  the  small  manufacturer  must  be  accom- 
plished. It  is  a  duty  which  society  owes  to  itself  to  free  itself 
from  the  fetich  that  competition  is  the  cure  for  every  ill,  and  to 
see  to  it  that  the  small  manufacturer  is  again  given  his  deserved 
opportunity.  Society  is  paying  the  price  in  high  costs  of  living 
for  permitting  the  small  manufacturer  to  be  crushed,  and  self- 
preservation  demands  his  reinstatement  in  the  social  scheme. 

The  system  of  communal  manufacturing  here  outlined  should 
gradually  prove  itself  an  effective  means  whereby  society  will 
again  utilize  the  force  which  should  be  the  greatest  of  all  indus- 
trial forces,  the  initiative  of  the  newly  risen  manufacturer,  an 
initiative  which  is  now  crushed  by  aggregations  of  capital,  which 
smother  competition  on  one  hand  and  oppress  the  consumer  on 
the  other. 


CHAPTER  XV 
BUSINESS  IS  BUSINESS 

What  "Business  is  business"  really  means — A  grueling  contest — Business  in 
politics — Its  twin  evil  of  politics  in  business — Blackmailing  laws  and 
exploitation  of  business  men — Results  of  unbridled  competition — 
— Genesis  of  the  trusts — Destructive  effects  of  the  "show-me"  spirit — 
Characteristics  of  the  American  business  man — Capital  and  the 
patentee — Business  men  and  the  banks — Why  05%  of  business  men  ulti- 
mately fail — How  our  23,000  banks  strangle  business — Menace  of  our 
antiquated  banking  methods — The  over-lordship  of  the  capitalist — Re- 
markable advantages  of  Cerman  banking  system — Wild-cat  promoting 
in  the  United  States — Dangerous  powers  of  the  post  office — What  the 
post  office  can  do  to  your  mail — Spectacular  arrests — Political  motive 
back  of  police  raids — Formation  of  public  opinion — Editors  with  axes 
to  grind — How  Edison  in  Germany  turned  a  newspaper  grindstone — 
What  Edison  learned  abroad — German  architecture — Consumption  of 
alcohol — What  a  German  thinks  water  is  for — Eight  suffragettes  at  a 
soda  fountain — Effective  method  of  German  government  in  dealing  with 
newspaper  correspondents — How  Edison's  eyes  were  opened  in  German 
cities — 36  lessons  that  he  learned  in  Germany. 

American  business  men,  while  energetic  and  resourceful,  are 
suspicious,  largely  unscrupulous  and  given  to  the  use  of  ques- 
tionable methods,  too  readily  excused  by  the  phrase,  ''business 
is  business."  The  "business"  that  is  ''business"  is  usually 
some  kind  of  knavery  or  double  dealing  that  "gets  by"  be- 
cause "nothing  succeeds  like  success." 

There  is  prevalent  much  of  the  spirit  which  is  reflected  by  the 
slogan  "do  other  people  before  they  do  you,"  and  this  with 
graft,  "rake-offs"  and  the  "show-me"  spirit  and  cut  throat 
competition,  makes  business  life  a  grueling  contest,  which  in 
the  final  sum  total,  amounts  to  everybody  sacrificing  everything 
that  a  few  may  succeed. 

The  evil  of  politics  in  business  is  only  the  other  side  of  the 
mask  of  business  in  politics.  The  municipal  plums  tempt  the 
business  man,  and  in  his  greed  he  does  not  scruple  to  take  any 
and  every  advantage  and  exert  every  expedient  and  bribe  to 
gain  the  prize.  The  politician,  when  the  business  man  has  over- 
reached himself,  in  turn  takes  advantage,  and  by  exposing  and 

215 


216  THE  PRICE  OF  INEFFICIENCY 

harassing  him,  turns  the  business  man's  shortcomings  to  his 
own  political  profit. 

This  process  is  worked  out  in  numberless  ways,  and  obtains 
from  one  end  of  the  scale  to  the  other.  The  policeman  accepts 
a  bribe  and  allows  the  saloon  keeper  to  keep  open  during  for- 
bidden hours.  The  law  was  passed  for  the  purpose  of  enabling 
the  policeman,  and  those  "higher  up,"  to  take  advantage  of  the 
saloon  keeper's  greed.  If  the  saloon  keeper  was  honest  and 
shut  up  and  refused  to  give  the  bribe,  if  he  controlled  his  greed, 
both  he  and  the  policeman  would  be  out  of  pocket;  but  black- 
mailing laws  would  not  exist,  and  in  all  probability  a  fair  clos- 
ing law  would  be  worked  out,  in  keeping  with  the  real  public 
sentiment  of  the  community.  It  is  very  easy  to  get, such  black- 
mailing law^s  passed  in  American  legislatures,  on  account  of  the 
professional  reformer.  The  moral  intimidation  that  he  exer- 
cises, a  strange  contrast  to  the  ulterior  aims  of  the  boss,  fits  like 
a  hand  in  a  glove  to  the  latter 's  purpose,  and  they  produce  the 
whitened  sepulcher  of  American  laws,  the  reformer  polish- 
ing the  exterior  and  the  boss's  evil  designs  well  concealed 
within. 

At  the  other  extreme,  presidents  make  political  capital  out  of 
large  combinations  of  capital,  which  would  not  have  come  into 
existence  if  earlier  presidents  had  executed  the  laws.  The 
usual  course  of  legislation  is,  when  an  abuse  arises,  to  pass  a 
drastic  law,  which  settles  the  matter  for  the  time  being.  Vio- 
lators are  blackmailed,  either  directly  or  indirectly  through 
campaign  contributions,  and  everything  is  under/ cover,  until 
finally  the  stench  becomes  so  great  that  public  opinion  demands 
action.  The  politicians  then  loosen  the  full  fury  of  the  law 
on  the  heads  of  the  violators,  gaining  great  political  capital 
thereby,  until  the  sympathy  of  the  public  is  aroused,  and  a  re- 
action comes,  in  which  the  final  condition  is  very  similar  to  that 
existing  before  the  whole  farce  began. 

This  alternate  blackmailing  and  exploitation  of  business  men 
by  politicians  and  the  bribery  in  one  form  or  another  of  politi- 
cians by  business  men,  causes  continual  turmoil,  which  hampers 
development  and  never  promises  to  end,  beginning  in  a  new 
quarter  w^hen  it  dies  down  in  an  old  one. 

Competition  in  America  is  a  cut-throat  thing  which  ruins 
business  men  by  hundreds  of  thousands,  to  the  ultimate  disad- 
vantage of  the  consumer.  "While  competition  is  held  up  as  a 
panacea  for  trusts,  it  is  in  reality  the  cause  of  trusts.     Business 


BUSINESS  IS  BUSINESS  217 

men  in  seeking  to  escape  destruction  from  unbridled  competi- 
tion, as  well  as  to  procure  greater  gains,  were  drawn  into  com- 
binations which  in  turn  crushed  the  more  independent  business 
men  or  forced  them  to  join  the  combinations,  sacrificing  their 
OAvn  business  identity.  Had  competition  been  properly  regu- 
lated and  unfair  methods  prevented  by  law,  trusts  could  not 
have  arisen.  In  Germany,  for  example,  a  competitor  is  not  al- 
lowed to  cut  prices  simply  for  the  sake  of  killing  a  rival.  No 
such  industrial  wars  are  allowed,  as  the  public  realizes  that  this 
is  the  seed  of  monopoly.  Consequently  the  trusts,  as  we  know 
them,  do  not  sprout  so  readily,  and  all  the  turmoil  and  the 
shouting  are  nipped  in  the  bud.  The  fetich  of  free  competition 
has  cost  the  American  public  dearly,  for  free  competition  in- 
cludes unfair  competition,  and  leads  directly  to  monopoly. 

One  of  the  means  whereby  unfair  competition  is  prevented  in 
Germany  is  the  law  against  false  representation. 

Consular-General  A.  W.  Thackara,  at  Berlin,  states  in  the 
U.  S.  Consular  Reports: 

"The  laws  of  Germany  are  very  strict  regarding  false  repre- 
sentations in  advertising,  such  as  putting  extravagant  values  on 
goods  that  are  undoubtedly  misrepresented.  Article  4  of  the 
law  which  applies  to  such  cases  is  as  follows : 

"  'Whoever,  with  intent  to  call  forth  the  appearance  of  an 
especially  advantageous  offer,  shall  in  public  announcements  or 
communications  intended  for  a  larger  circle  of  persons,  as 
touching  business  relations,  especially  as  touching  the  character, 
origin,  manner  of  production,  or  the  fixing  of  the  price  of  goods, 
the  possession  of  marks  of  distinction,  the  motive  or  purpose  of 
sale  or  the  abundance  of  supplies,  shall  kno'Rdngly  make  false 
representations  tending  to  mislead,  is  liable  to  imprisonment  up 
to  one  year  and  to  a  money  penalty  up  to  five  thousand  marks 
or  to  one  of  these  punishments.' 

"When  a  person  is  found  guilty,  a  fine  up  to  5,000  marks 
($1,190)  is  imposed  for  the  first  offense;  for  the  second  offense, 
a  fine  up  to  5,000  marks  or  imprisonment  up  to  one  year;  and 
the  third  offense,  invariably,  the  guilty  party  is  sent  to  prison 
for  a  term  not  exceeding  one  year. 

"In  addition,  a  person  convicted  of  false  advertisement  is 
obliged  to  insert  an  advertisement  in  a  certain  number  of  news- 
papers stating  that  he  has  been  convicted  of  unfair  competition. 
Usually  he  is  required  by  the  Judge  to  insert  the  advertisement 
in  at  least  twenty-five  papers,  and  sometimes  in  as  many  as  a 


218  THE  PRICE  OF  INEFFICIENCY 

hundred.  The  Judge  usually  dictates  the  text  of  the  advertise- 
ment and  specifies  the  papers  in  which  it  shall  be  inserted." 

The  extent  to  which  false  representation  goes  in  the  United 
States  is  shown  by  the  prosecution  of  the  government  officials 
during  the  fiscal  year  1911,  in  which  522  individuals  were  in- 
dicted on  charges  of  using  the  mail  in  furtherance  of  schemes 
to  defraud.  During  the  same  period,  196  persons  were  tried, 
of  which  184  w^ere  convicted,  12  acquitted  and  177  awaiting 
trial,  while  72  are  awaiting  Grand  Jury  action,  and  28  were 
arrested  but  not  indicted.  The  number  who  got  away  and  are 
being  traced  is  46. 

The  schemes  in  which  there  were  convictions  generally  fell 
under  the  following  groups: 

Promoting  and  sale  of  worthless  mining  or  other  stocks. 

Inducing  betting  on  fake  horse-races  and  athletic  contests. 

Fake  land  schemes. 

Commission  merchant  swindles. 

Selling  worthless  goods  through  misrepresentations. 

Obtaining  commissions  on  fraudulent  orders. 

Work-at-home  schemes. 

Failure  to  furnish  goods  schemes. 

Fake  correspondence  schools. 

Sale  of  cheap  books  and  divining  rods  for  locating  minerals. 

Phoney  guarantees  of  stocks  and  bonds. 

Forged  bills  of  lading  in  cotton  deals. 

Brokerage  swindles. 

Obtaining  money  by  impersonating  others. 

Selling  state  rights  and  establishing  fictitious  agencies. 

Selling  unfair  gambling  devices. 

"No  fund"  check  schemes. 

Matrimonial  schemes. 

Selling  canceled  postage  stamps  and  Mexican  money. 

Turf  tipster  schemes. 

Selling  cigar  outfits. 

Defrauding  employers  by  means  of  forged  leases  and  keeping 
money  received  from  cash  customers. 

Defrauding  insurance  companies  for  alleged  injuries. 

Obtaining  expense  money  on  promises  to  sell  stock. 

Requesting  fees  for  fake  positions. 

Selling  the  rights  to  a  patent  many  times  over  in  the  same 
state. 

Securing  advance  payments  on  goods  not  delivered. 


BUSINESS  IS  BUSINESS  219 

Obtaining  payments  from  relatives  of  deceased  persons  for 
goods  supposed  to  have  been  ordered  before  death. 

Obtaining  money  from  alleged  heirs  to  estates. 

Obtaining  money  to  assist  in  securing  fake  inheritances. 

Sales  of  fake  receipts. 

Green  goods  swindles. 

Obtaining  subscriptions  for  charitable  iustitiitions. 

Fake  employment  bureaus. 

Selling  interest  in  non-existing  moving  picture  theaters. 

Selling  diplomas  and  requiring  little  or  no  study  before  grant- 
ing them. 

Offering  to  instruct  persons  in  the  science  of  mind  concentra- 
tion. 

Fake  trance  mediums. 

Forged  cheeks  and  blackmail  schemes. 

The  cost  in  time  and  money  to  the  government  in  the  investi- 
gation and  prosecution  of  these  cases  has  been  so  great  and  the 
corresponding  loss  to  other  important  features  of  the  postal 
service  demanding  attention  is  so  apparent  that  Chief  Inspector 
Sharp  recommends  that  the  Department  of  Justice  take  over  the 
investigation  of  "get-rich-quick"  cases. 

The  attitude  of  mutual  distrust  and  suspicion  which  the  em- 
ployer and  employee  exhibit,  is  also  seen  in  the  relations  of  busi- 
ness men  to  each  other  and  between  business  men  and  the  pub- 
lic. 

The  American  even  takes  a  gi'eat  pride  in  his  suspicious  dis- 
position, which  is  glorified  in  the  expression,  "I'm  from  Miss- 
ouri, you  must  show  me,"  a  phrase  which  sprang  instantly  into 
wide  currency  after  having  been  used  by  a  western  lawj'er  who 
was  prosecuting  a  trust  in  an  eastern  court.  The  vast  popu- 
larity of  the  expression,  which  is  excessively  vulgar  and  com- 
monplace in  itself,  reflects  a  characteristic  feeling  of  Americans. 
In  many  respects,  the  American  is  gullible,  and  consequently  a 
great  number  of  fakes  of  various  kinds  are  perpetrated.  Hav- 
ing been  repeatedly  "stung,"  he  is  constantly  on  the  lookout 
for  further  trouble.  To  announce  that  he  must  be  shown  is 
therefore  done  with  a  certain  pride,  a  warning  that  he  is  not 
to  be  stung  again.  But  with  the  usual  extravagance  of  the 
Americans,  the  "show-me"  spirit  is  overdone,  and  it  becomes  a 
destructive  cynicism. 

The  American  business  man  is  not  to-day  a  constructive 
pioneer.     He  waits  until  he  sees  a  thing  fully  demonstrated 


220  THE  PRICE  OF  INEFFICIENCY 

with  other  people's  money  before  he  is  willing  to  invest.  He  is 
always  looking  for  a  sure  thing  and  wants  51%  of  it.  If  a  new 
proposition  comes  along  in  the  shape  of  drawings,  by  which  it 
should  be  readily  understood  and  passed  upon  by  his  engineers, 
he  waits  to  see  the  thing  in  concrete  shape  first.  The  American 
inventor  thus  has  a  hard  row  to  hoe,  and  finds  capital  an  almost 
impossible  thing  to  obtain,  while  business  men  are  much  more 
interested  in  seeing  how  they  can  infringe  the  patent  than  in 
acquiring  a  legitimate  interest  in  it.  They  always  desire  ex- 
clusive control,  not  only  of  the  invention,  but  everything  else 
the  inventor  may  invent  in  the  future,  for  which  their  most  fre- 
quently offered  terms  are  a  small  salaiy  per  week  until  the  in- 
ventor is  fired.  If  a  valuable  invention  comes  along  that 
threatens  a  standard  article,  it  is  most  likely  to  be  acquired  and 
bottled  up,  serving  no  useful  purpose  whatever  but  to  prevent 
the  manufacturer's  antiquated  article  from  being  driven  off  the 
market. 

Capital  goes  slowly  and  grudgingly  into  new  ventures,  and 
the  result  is  that  a  multitude  of  new  things  which  prove  so  prof- 
itable abroad,  do  not  come  into  existence  at  all  in  America,  and 
foreign  improvements  are  adopted  only  after  they  have  been 
used  for  years. 

Yet  the  moment  a  good  thing  is  developed  by  someone  else 
there  is  a  rush  to  grab  it,  and  all  kinds  of  imitations  appear  on 
the  market  and  the  business  is  apt  to  be  ruined  for  everyone. 
Too  often,  however,  when  exclusive  control  is  obtained  of  an 
article,  the  greed  of  the  proprietors  exhibits  itself  in  the  form 
of  charging  extortionate  prices,  when  with  better  business  men 
in  control,  the  article  would  have  a  vastly  larger  sale  at  a  fair 
price.  The  tendency  to  "charge  all  the  traffic  will  bear"  is 
thus,  in  every  line  of  business,  a  disastrous  characteristic.  The 
lack  of  initiative  in  new  propositions,  while  at  the  same  time 
enormous  sums  are  spent  in  advertising  trade  marks,  holds  de- 
velopment back.  The  creation  of  a  trade  mark  is  a  strange 
process  in  America.  The  press  and  dead  walls  are  suddenly 
flooded  with  some  combination  of  letters  supposed  to  be  a  word, 
almost  always  idiotic  in  the  extreme,  though  sometimes  stupid, 
infantile  or  in  bad  taste,  and  this  monstrous  thing  is  jammed  up 
in  eveiy  conceivable  space  until  the  backers  of  the  idea  either 
go  broke  or  make  a  fortune  by  the  sale  of  the  hideously  named 
article.  Thus  is  the  English  language  enriched  from  day  to 
day. 


BUSINESS  IS  BUSINESS  221 

The  attitude  of  banks  towards  new  ventures  and  toward  their 
regular  customers  is  in  America  to-day  totally  out  of  line  with 
the  proper  functions  of  banking. 

Mr.  Joel  Shoemaker  in  "The  Brutality  of  Business"  in  the 
Trend  for  October,  1911,  says: 

"Ninety-five  per  cent  of  the  business  men  in  the  United 
States  become  financial  failures  while  living,  or  die  in  debt. 
The  chief  asset  left  to  the  wives  and  children  is  some  form  of 
life  insurance,  the  policy  not  becoming  a  part  of  the  estate. 
Such  statements  come  from  experts  in  their  field  of  research, 
and  may  be  considered  as  about  correct.  For  when  we  go  into 
the  details  of  commercial  life,  and  read  the  daily  tragedies  writ- 
ten on  the  faces  of  the  oppressed,  the  only  wonder  is  that  the 
ninety  and  nine  human  sheep  go  over  the  precipice  to  death, 
and  leave  one  able  to  stand  alone  and  look  down  upon  the 
wrecks. 

"The  banking  system  is  the  foundation  of  what  we  designate 
as  our  business  plan  of  action.  It  covers  the  city  and  country 
and  marks  the  pathway  to  financial  success  or  commercial  de- 
struction. As  we  have  always  been  taught  to  judge  a  tree  by 
its  fruits,  and  the  returns  from  our  banks  show  almost  com- 
plete failure,  the  natural  conclusion  must  be  that  the  system  is 
responsible  for  financial  distress,  commercial  loss  and  general 
devastation  of  the  country,  periods  of  poverty,  and  money 
scarcity  in  the  history  of  the  past  have  established  precedents 
for  indicting  the  banking  system  as  one  of  the  worst  enemies 
to  individual  and  community  success,  known  to  the  civilized 
world. 

"We  have  in  this  country  about  23,000  banks,  representing 
a  combined  capitalization  of  $1,900,000,000  shown  on  paper 
through  the  articles  of  incorporation,  or  on  the  stock  books  of 
the  various  banks.  The  deposits  of  these  financial  institutions 
aggregate  approximately  seventeen  thousand  millions,  or  more 
than  eight  times  the  capital  stock  of  the  corporations  holding 
the  funds  in  trust  for  the  depositors.  The  figures  are  borrowed 
from  one  of  the  best  informed  financiers  of  Boston,  and  must 
be  taken  seriously.  They  give  an  insight  into  the  secret 
chambers  of  modem  finance  and  show  why  so  many  men  fail  in 
business. 

"There  are  7,200  national  banks,  having  the  monopoly  of 
issuing  notes,  to  be  covered  by  government  bonds.  Those  banks 
have  outstanding  at  present  something  like  $700,000,000  of  that 


222  THE  PRICE  OF  INEFFICIENCY 

bond  secured  circulating  paper.  Such  notes  are  comparatively 
safe,  although  as  one  banker  says,  'It  is  probably  the  most  un- 
scientific and  inelastic  note  circulation  in  existence."  But  the 
depositors  have  no  guarantee  of  even  safe  handling  of  their 
funds,  unless  they  live  in  the  advanced  localities  where  wise 
men  of  the  day  have  enacted  laws  requiring  guarantee  of  de- 
posits. 

"Money  is  not  personal  property  to  be  hidden  away  in  deposit 
boxes,  buried  in  tin  cans,  or  locked  in  legally  authorized  bank 
safes.  It  is  the  property  of  the  people,  a  circulating  medium, 
and  its  use  is  an  absolute  necessity  in  the  daily  business  trans- 
actions of  the  masses.  Every  dollar  in  excess  of  legal  reserve 
fund  designated  for  banks,  diverted  from  its  legitimate  channels 
of  trade,  and  stopped  on  its  mission  of  a  debt  payer,  assists  in 
clogging  the  wheels  of  commerce  and  producing  panics.  The 
reserve  being  25%  of  deposits,  every  sum  stored  away  above  that 
amount,  constitutes  a  robbery  of  the  people,  in  taking  from  the 
masses  the  use  of  that  which  belongs  to  them  and  which  brings 
food  and  clothing. 

' '  The  common  people  must  stand  for  the  losses  in  the  business 
world.  The  farmers  suffer  because  of  not  getting  reasonable 
prices  for  their  products;  the  w^orkingman  loses  in  decreased 
wages,  being  out  of  employment,  and  risking  the  possibility  of 
ever  getting  pay  for  his  work,  and  the  whole  consuming  public 
— the  masses — foot  the  bills.  As  a  grocer  said,  when  asked  to 
sign  a  protest  against  exorbitant  freight  rates:  'It  is  nothing  to 
the  merchant  what  the  freight  bills  amount  to,  the  consumers 
must  pay  the  bills.'  So,  in  this  fluctuating  market  the  con- 
sumers are  the  ultimate  losers  in  all  that  goes  to  make  up  for 
deficiencies  caused  by  poor  management,  ignorant  manipulation 
and  false  standards  of  financial  tokens,  in  the  business  world. 

"AVhy  are  such  conditions  permitted  to  continue  in  the  com- 
mercial centers  of  our  country?  The  answer  is  plain  enough. 
It  is  in  the  interests  of  capitalism.  A  stable  financial  system 
would  prevent  extortion  in  interests,  commission  on  loans,  sell- 
ing of  human  slaves  into  capitalistic  bondage,  and  establish  a 
sound  money  basis  that  would  insure  peace  and  prosperity. 
Such  conditions  are  desired  neither  by  the  politicians  or  capital- 
ists. Both  live  on  strife  and  uncertainties.  Trouble  among 
the  people  is  capital  for  such  leaders,  because  it  brings  money,- 
votes  and  power  to  their  hands  and  forces  the  masses  to  humili- 
ating acts  of  beggary." 


BUSINESS  IS  BUSINESS  223 

Banking  and  currency  form  a  subject,  not  only  of  the  great- 
est importance  to  the  public,  but  a  subject  which  is  difficult  to 
understand,  and  which  should  be  settled  by  disinterested  ex- 
perts. Yet  lawmakers  see  possibilities  of  political  capital  in 
it,  and  attack  it  with  ignorant  recklessness,  while  as  for  the 
experts,  most  of  those  who  really  understand  finance  are  more 
or  less  tinged  with  capitalism  and  hence  cannot  view  the  subject 
in  the  proper  light. 

Our  present  system  is  particularly  well  adapted  to  promote 
the  interests  of  trusts  as  opposed  to  the  small  business 
man. 

The  thing  works  itself  out,  briefly,  in  the  following  manner: 
Large  corporations  are  formed  and  those  backing  them  are 
ready  at  all  times  through  the  instrumentality  of  the  Stock  Ex- 
change to  repurchase  the  stock  at  varying  prices.  In  fact,  by 
buying  and  selling  among  themselves,  they  keep  up,  often,  when 
necessary,  a  fictitious  appearance  of  interest.  Thus  any  owner 
of  the  stock  may  sell  at  any  time,  there  always  being  a  market. 

Money  which  is  deposited  in  banks  is  loaned  by  the  bankers 
who  accept  stocks  of  such  companies  as  collateral  security.  Thus 
the  owner  of  such  stock  may  either  sell  it  or  borrow  money  on 
it  at  any  time,  since  the  banks,  knowing  that  there  is  always  a 
market  for  it,  may,  if  the  loan  is  not  paid  at  maturity,  get  their 
money  back  by  the  sale  of  the  collateral.  Thus  the  stocks  and 
bonds  of  trusts  are  convertible  into  money  at  short  notice. 

Organizers  of  trusts  often  borrow  money  on  their  own  hold- 
ings to  form  other  trusts,  and  thus  one  by  one  the  industries  of 
the  country  fall  under  the  control  of  financial  interests,  the 
latter  using  the  very  bank  balance  that  the  manufacturer  has 
in  the  bank  to  form  the  corporation  which  destroys  his  business. 

There  are  two  kinds  of  loans  based  on  corporation  securities: 
call  loans,  which  the  banks  may  require  payment  on  at  any 
moment,  and  time  loans  running  from  thirty  days  to  a  year  or 
more.  The  rate  of  interest  on  call  loans  is  readjusted  every 
day  and  most  of  them  are  loans  which  banks  have  made  to 
brokers. 

At  seasons  of  the  year  when  money  is  plentiful,  the  business 
man  deposits  it  in  his  bank,  which  redeposits  it  in  a  New  York 
bank,  where  instead  of  remaining  idle,  it  can  be  loaned  out  from 
day  to  day  at  a  certain  rate  of  interest,  but  at  the  same  time  it 
is  always  available. 


224  THE  PRICE  OF  INEFFICIENCY 

The  speculator,  in  the  office  of  the  broker,  sees  from  the  rate 
of  interest  that  money  is  plentiful.  He  therefore  puts  up,  say 
$10,000  cash  of  his  own,  orders  his  broker  to  buy  $100,000  worth 
of  stock  in  trust,  and  the  stock  is  handed  to  the  bank  in  ex- 
change for  a  loan,  the  speculator  thus  raising  the  necessary 
money  to  pay  for  the  $100,000  stock  he  has  bought,  $10,000  be- 
ing his  own  money  and  $90,000  borrowed,  eventually  from  the 
deposits  of  banks  all  over  the  country. 

Thus  whenever  money  is  plentiful,  the  speculators  buying  for 
a  rise,  make  the  stock  scarcer,  as  all  want  to  do  the  same  thing 
and  only  a  certain  amount  of  the  stock  is  in  the  market  at  any 
one  time.  With  numerous  buyers,  the  stock  goes  up,  and  a 
boom  in  the  Stock  Exchange  is  on,  which  presently  attracts  the 
attention  of  the  public.  They  buy  at  high  prices.  They  with- 
draw money  from  deposit  for  this  purpose.  The  speculators 
sell  at  a  profit.  He  acquires  his  profit,  he  has  removed  that 
much  money  from  the  pockets  of  others  without  giving  any- 
thing in  exchange  except  the  risk  he  went  to.  The  money  that 
might  still  be  free  to  go  into  business  has  passed,  partly  to  the 
profit  of  the  speculator  and  partly  to  the  organizer  of  the  trust 
in  exchange  for  its  stock.  No  actual  values  have  been  lost,  but 
a  transfer  of  ownership  has  taken  place  from  the  small  man  to 
the  greater.  The  readiness  of  the  public  to  buy  the  stocks  of 
the  trusts  has  created  a  terrible  business  depression.  The  wealth 
of  the  country  has  passed  to  the  control  of  a  few  persons, 
through  their  ability  to  operate  the  device  known  as  the  stock 
exchange  and  through  our  currency  and  banking  system,  since 
the  stocks  of  the  trusts  formed  have  been  sold  at  prices  far  in 
excess  of  their  actual  value  by  means  of  this  device.  The  pub- 
lic have  bought  stock  worth  much  less  than  they  paid  for 
it,  and  have  impoverished  the  sources  of  supply  of  money  so 
that  the  small  business  man  has  been  snuffed  out,  in  two  ways: 
One  simply  by  the  weight  of  capital  that  the  trusts  have  thrown 
in  the  scale  against  his  business  and  the  other  through  the  bank- 
ing system. 

Thus  if  a  business  man  has  in  hand  orders  for  $10,000  worth 
of  goods  and  has  only  $5,000  in  hand  with  which  to  buy  the 
goods  before  he  can  resell  them,  he  cannot  transact  that  piece 
of  business  unless  he  can  raise  $5,000.  With  proper  banking 
facilities,  he  should  be  able  to  go  to  a  bank,  borrow  the  money 
at  a  fair  rate  of  interest  on  his  notes  secured  by  his  $5,000  assets 
in  hand,  which  need  not  pass  to  the  possession  of  the  bank.     He 


BUSINESS  IS  BUSINESS  225 

could  thus  complete  his  transaction,  pay  off  his  obligations  and 
prosper.  But  can  a  merchant  go  to  a  bank  and  arrange  to  get 
credit  for  ten  times  as  much  as  the  capital  he  has  in  hand,  a3 
the  speculator  can  at  the  stock  exchange.  Certainly  not.  He 
is  indeed  fortunate  if  he  can  get  even  a  small  part  of  the  money 
after  signing  a  bond  that  would  make  Shylock  blush.  The  bank 
will  only  loan  him  on  the  best  security,  which  is  proper,  but  it 
will  often  refuse  him  on  any  security.  The  cash  is  in  New  York 
w^orking  for  the  speculators,  and  the  business  man's  business 
languishes  while  the  speculator  prospers. 

Then  hard  times  come.  The  speculator  has  killed  the  goose 
that  lays  the  golden  eggs.  The  business  man,  being  unable  to 
carry  on  his  transactions  for  want  of  available  capital,  cannot 
make  reasonable  profits.  The  trusts  crush  him  out  and  absorb 
the  money  he  might  do  business  with.  ]\Ioney  becomes  scarce 
and  the  result  is  immediately  felt  in  New  York.  Banks  do  not 
have  so  much  money.  They  are  not  anxious  to  take  call  loans. 
The  call  loan  rate  rises.  Speculators  cannot  make  so  much 
money.  They  watch  the  call  loan  rate  as  the  weather  man  does 
the  barometer.     It  shows  coming  storms. 

Then  the  speculators  begin  to  sell.  The  men  behind  the 
trusts  buy  only  what  they  must  to  keep  the  market  from  break- 
ing and  a  panic  ensuing.  Prices  decline  a  few  points  a  day,  but 
this  liberates  money,  and  the  business  man  finds  his  bank  more 
reasonable,  but  if  speculation  has  been  too  great  and  too  many 
people  have  borrowed  money  to  buy  stocks,  the  banks 
refuse  further  call  loans,  from  want  of  cash  themselves  or  for  the 
ulterior  purpose  of  furthering  a  reduction  in  the  price  of  stocks, 
so  that  they  can  repurchase  at  lower  level;  and  a  great  rush  for 
cash  ensues.  There  is  too  much  credit  outstanding,  too  many 
have  borrowed  money.  One  may  ask  how  could  it  be  borrowed 
if  it  did  not  exist.  Very  simply,  because  a  ten  dollar  bill  can 
be  borrowed  and  loaned  through  a  chain  of  a  dozen  friends  in 
a  day,  but  if  in  such  a  chain  of  friends,  the  bill  comes  back  to 
the  first  man  and  he  holds  it  and  demands  repayment  from  the 
man  he  has  loaned  it  to,  and  no  other  ten  dollars  can  be  found, 
or  nobody  else  willing  to  lend  any  of  them  a  ten  spot,  all  the 
friends  will  be  in  a  hole.  And  if  the  bills  are  $100,000  instead 
of  $10,  the  matter  is  not  so  simple,  although  the  principle  is  the 
same. 

In  conditions  of  a  panic,  when  the  speculators  have  borrowed 
too  much  all  around,  and  everybody  is  withdrawing  money  from 


226  THE  PRICE  OF  INEFFICIENCY 

banks  for  fear  they  wall  fail,  from  being  unable  to  get  back 
their  money  from  speculators,  all  the  money  is  practically  locked 
up  at  once,  and  perfectly  sound  concerns  all  over  the  country 
whose  assets  are  greater  than  their  liabilities  go  into  bankruptcy 
because  they  cannot  collect  what  is  owing  them  to  pay  what  is 
demanded,  even  though  the  latter  be  less.  Thus  out  of  the  ac- 
tivities of  the  speculators  playing  with  the  public's  money  real 
panics  grow  which  ruin  thousands  of  banks  and  business  firms 
and  throw  millions  out  of  employment.  Their  purchasing  power 
lost,  the  business  of  remaining  firms  is  greatly  reduced  and 
many  of  them  fail.  A  period  of  stagnation  results  in  which  a 
large  part  of  the  workers  are  out  of  work  and  only  such  ex- 
penses are  incurred  as  are  absolutely  necessary  to  keep  body 
and  soul  together.  In  time  the  surplus  on  hand  is  devoured  or 
worn  out,  and  new  purchasing  power  appears,  which  reemploys 
men,  restores  their  purchasing  value.  This  serves  to  reemploy 
other  men  and  gradually  the  row  of  blocks  which  fell  over  in 
the  panic,  draws  itself  into  an  erect  position  again,  ready  to 
tempt  the  speculator  to  further  excesses. 

What  the  country  needs  is  a  banking  system  which  will  place 
the  business  man  in  the  position  of  advantage,  rather  than  the 
speculator.  The  Stock  Exchange,  which  is  the  greatest  menace 
to  American  liberty  that  has  ever  appeared,  should  be  curtailed 
or  entirely  abolished.  Very  effective  measures  can  be  easily 
taken.  For  example,  a  bank  is  not  allowed  to  lend  more  than 
10%  of  its  capital  to  any  individual.  Laws  should  be  passed 
forbidding  it  to  lend  more  than  10%  of  its  capital  on  stocks  and 
bonds  as  collateral.  The  convertibility  of  one  share  of  stock 
into  another  is  one  of  the  cornerstones  of  Wall  Street.  That 
is  you  buy  100  shares  of  stock.  Certificate  No.  1561  is  the  same 
as  No.  52.  Either  may  be  delivered  to  you.  Or  you  may  bor- 
row Certificate  No.  52,  sell  it,  and  at  a  lower  price  repurchase, 
say  No.  1561,  or  any  other  number,  and  use  it  to  repay  the  loan 
of  stock,  thus  making  a  profit.  This  is  the  process  known  as 
short  selling.  It  is  one  of  the  pillars  of  Wall  Street,  and  the 
instrumentality  whereby  markets  are  broken.  While  it  works 
automatically  to  prevent  over-inflation,  it  is  a  highly  dangerous 
remedy.  It  would  probably  be  impossible  to  destroy  the  con- 
vertibility of  stocks,  but  real  estate  is  not  convertible,  and  true 
speculation  cannot  exist  without  such  convertibility,  and  does 
not  exist  without  it.  Speculation  in  commodities  depends  on 
convertibility  also,  as  one  bushel  of  wheat  is  the  same  as  another. 


BUSINESS  IS  BUSINESS  227 

Short  selling,  however,  while  at  times  a  serious  evil,  is  a  power- 
ful brake  against  a  runaway  market,  and  prevents  the  reckless 
inflation  of  stocks  to  enormously  high  levels  and  the  consequent 
panics  such  as  occurred  in  the  times  of  the  South  Sea  bubble. 
Short  selling  is  merely  a  weapon,  a  dangerous  one,  but  capable 
of  being  used  to  the  advantage  of  the  public  as  well  as  against 
the  public.  The  amateur  speculator,  the  lamb  who  so  quickly 
loses  his  little  fortune  in  speculation,  seldom  tackles  the 
short  side,  almost  always  buying  in  hope  of  a  rise,  a  process 
really  more  dangerous  than  that  of  selling  in  hope  of  a  de- 
cline. 

The  great  t^\-in  evils  of  Wall  Street,  however,  are  its  use  of 
bank  funds  for  speculation  and  the  system  of  ' '  wash  sales. ' ' 

A  "wash  sale"  occure  when  a  speculator  not  necessarily  a 
broker,  but  usually  a  promoter  or  in  some  way  interested  in  a 
company 's  stock,  gives  one  broker  an  order  to  buy  the  stock  and 
another  broker  an  order  to  sell  an  equal  amount  of  the  same 
stock  at  a  price  which  he  fixes.  The  brokers  meet  on  the  stock 
exchange  and  carry  the  deal  through  without  either  knowing  who 
the  other  is  acting  for,  as  they  very  jealously  guard  their  cus- 
tomers' secrets. 

Several  such  "wash  sales"  during  a  day  give  an  appearance 
of  activity  to  the  market,  at  prices  either  rising  or  falling  as  suits 
the  purpose  of  the  speculator  working  the  wires.  The  ability 
thus  to  fix  prices  fictitiously  is  used  to  fleece  the  public,  and  is  in 
reality  nothing  short  of  a  crime.  Stock  Exchange  brokers  are 
in  effect  only  a  private  club  of  auctioneers,  bidding  and  knocking 
dowTi  stocks  to  each  other  for  their  clients,  the  speculators. 
There  is  a  law  in  New  York  against  conducting  a  fake  auction 
and  small  fry  auctioneers  are  going  to  jail  all  the  time  for  vio- 
lating it.  A  large  part  of  the  transactions  of  the  stock  exchange 
are  fake  sales  made  to  influence  the  public.  If  brokers  were 
licensed  as  other  auctioneers  are,  and  were  compelled  on  closing 
a  sale  to  disclose  their  principals'  names,  such  fake  transactions 
as  wash  sales  would  be  automatically  disclosed  and  would  have 
to  cease.  A  very  stringent  rule  requires  the  brokers  to  know 
who  their  customers  are.  A  supplementary  statute  forbidding 
speculators  to  carry  accounts  in  false  names  with  brokers  would 
effect  the  complete  remedying  of  this  gigantic  swindle. 

The  stock  exchange,  in  fact,  aspires  to  a  monopoly  of  gambling 
and  swindling  in  the  United  States.  The  community  of  interest 
which  it  represents  has  promoted  legislation  against  lotteries, 


228  THE  PRICE  OP  INEFFICIENCY 

race  tracks  and  swindling  by  mail  and  is  now  the  only  form  of 
open  gambling  not  forbidden  by  law. 

The  slight  skim  of  legitimate  transactions  is  the  cloak  of  re- 
spectability which  the  organization  throws  over  its  huge  body  of 
gambling  and  most  terrific  outcries  are  made  when  it  is  accused 
of  gambling.  Nevertheless  its  major  purpose  is  gambling  and 
the  crafty  system  which  has  been  built  up  for  exploiting  the  pub- 
lic with  the  public's  own  money  obtained  through  banks  can 
never  be  thoroughly  broken  up  until  the  stock  exchange  is  abol- 
ished, and  prosperity  can  never  return  while  the  leeches  of 
finance  continue  to  drain  the  life  blood  of  commerce  into  their 
own  creations. 

Wall  Street  is  a  great  Frankenstein  of  finance,  a  monster  whose 
claws  are  deep  into  the  body  of  public  enterprise,  too  deep  it 
would  seem  to  be  torn  out,  but  torn  out  they  must  if  worse 
conditions  are  not  to  come.  The  world  existed  for  centuries 
without  Wall  Street  and  only  in  the  last  generation  has  this 
great  parasite  grown  to  such  threatening  proportions.  Wall 
Street  is  unnecessary,  criminal  and  insatiable.  It  should  be  de- 
stroyed at  whatever  cost,  if  not  for  our  own  benefit,  then  for  that 
of  future  generations. 

While  a  very  few  simple  laws  with  teeth  in  them  would  suffice 
to  destroy  the  financial  incubus,  if  enforced  by  resolute  execu- 
tives, the  moneyed  powers  have  so  thoroughly  identified  them- 
selves with  the  government  by  secret  avenues  and  political  obli- 
gations that  they  are  in  fact  the  government's  government. 

The  units  of  the  public  are  widely  separated,  an  army  of  Lilli- 
putians, and  each  one  is  in  awe  of  the  financial  giant.  A  para- 
lyzing sympathetic  influence  is  thus  wielded  and  each  Lilliputian 
fears  to  bestir  himself  for  fear  of  attracting  unfavorable  notice 
and  all  remain  in  slavery. 

Such  spectacles  come  to  be  witnessed  as  a  president  of  the 
United  States  sanctioning  monopolistic  combinations  and 
another  doing  all  in  his  power  to  block  the  progress  of  a  congres- 
sional investigating  committee. 

Such  presidents  are  mere  lackeys  of  Wall  Street  and  their 
names  deserve  to  be  smudged  out  of  history  with  the  thumb  of 
public  disapproval. 

Althougli  servitor  after  servitor  of  the  financial  powers,  dis- 
credited in  the  public  offices  to  which  they  w^ere  elected  under 
false  pretenses,  has  gone  down  in  defeat  and  disgrace,  their  suc- 
cessors again  and  again  prove  of  the  same  stripe.     The  quickly 


BUSINESS  IS  BUSINESS  229 

shifting  sands  of  politics  breeds  traitors  to  the  public  interest  who 
though  having  constituted  the  government  one  day  are  seen  to 
emerge  the  next  day  as  presidents  of  banks  and  financial  com- 
panies and  salaried  employees  of  the  trusts,  while  a  new  gang  in- 
fests the  seats  of  power.  The  government  is  thus  intangible  and 
irresponsible.  The  crimes  of  one  set  of  officials  cannot  be  visited 
either  effectively  on  their  heads  or  on  the  heads  of  their  successors. 
There  is  nothing  definite  that  can  be  called  the  government.  It 
is  only  a  badly  worldng  impersonal  mechanism,  now  in  control 
of  one  set  of  engineers  and  now  another,  all  interested  in  run- 
ning it  for  theii-  own  ends  and  not  for  the  benefit  of  the  pub- 
lic. 

The  evils  that  confront  us  are  deeply  rooted  in  an  ineffective 
system,  and  to  effect  a  cure  measures  must  be  taken  which  will  go 
to  the  bottom  of  things.  It  is  not  time  to  temporize  or  delay; 
it  is  a  fight  that  must  be  fought,  and  the  sooner  we  know  who  is 
to  survive,  the  financial  powers  or  the  public,  the  better  off  we  will 
be. 

The  first  thing  the  business  man  must  have  is  at  least  an  equal 
chance  with  the  speculators.  He  should,  in  fact,  have  the  ad- 
vantage on  his  side  that  the  speculator  now  enjoys,  instead  of  the 
advantage  being  on  the  speculator's  side.  One  of  the  prime 
requisites  is  to  give  his  assets  convertibility,  and  convertibility 
must  be  given  to  his  obligations.  That  is  to  say,  we 
should  institute  a  new  system  of  banking  whereby  the  business 
man's  notes  which  he  gives  to  the  bank,  could  be  redis- 
counted  by  the  bank,  that  is,  passed  on  to  some  other 
bank  in  some  other  part  of  the  country  where  money  was 
more  plentiful.  If  the  notes  of  business  men  were  in  denomi- 
nations of  $100,  $500,  $1,000  and  $10,000,  and  on  being  given 
were  stamped  by  the  bank  in  a  manner  which  pledged  not  only 
the  resources  of  that  bank  to  their  repayment,  as  well  as  the 
resources  of  the  merchant  himself,  and  in  addition  the  resources 
of  every  other  bank  in  the  United  States,  such  notes  would 
become  convertible  and  could  be  sent  to  financial  centers  and  be- 
come objects  of  barter  and  sale  in  the  place  of  the  present  cor- 
poration securities.  Under  present  circumstances  the  govern- 
ment only  issues  currency  to  the  value  of  its  bullion  and  national 
banks  are  allowed  to  issue  currency  to  the  value  of  certain  gov- 
ernment bonds  which  they  hold.  Thus  the  amount  of  money  in 
existence  is  rigidly  fixed  and  cannot  be  increased  or  decreased 
in  volume  without  the  greatest  difficulty.     In  times  of  a  panic 


230  THE  PRICE  OF  INEFFICIENCY 

this  bit  of  money,  which  is  vastly  less  in  value  than  the  posses- 
sions of  the  citizens  of  the  country,  but  the  only  medium  of  ex- 
change, is  instantly  locked  up  by  everybody  who  has  any  of  it, 
and  ruin  results  for  all,  through  inability  to  get  hold  of  a  few 
tokens  of  value,  although  all  have  no  end  of  valuables  worth 
money,  if  thej'  could  be  exchanged  for  the  tokens,  the  supply  of 
which,  through  a  faulty  legislative  and  banking  system,  is  re- 
duced to  a  minimum  which  cannot  be  readily  expanded.  Bank- 
ers, too,  are  loath  to  expand  their  currency  issues,  as  when  money 
is  free  again,  they  are  paying  3%  and  4%  for  the  use  of  gov- 
ernment bonds  to  make  currency  which  they  can  only  lend  at  2% 
on  call  loans  in  New  York. 

What  the  country  needs  is  convertibility  of  business  men's 
obligations  or  notes,  and  an  asset  currency,  that  is  to  say,  that 
when  a  man  goes  to  the  bank  and  pledges  his  house  on  his  note 
and  the  bank  pledges  its  resources  and  all  the  banks  of  the 
country  through  some  central  institution,  pledge  their  resources 
for  its  repayment,  the  banks  should  be  permitted  to  issue  actual 
currency  in  the  form  of  bank  notes  against  say  25%  of  that 
value.  An  unlimited  supply  of  the  tokens  of  value  would  thus 
be  available  whenever  wanted,  and  no  panic  could  ever  arise 
because  panics  are  caused  by  the  locking  up  of  tokens  of  money, 
and  Math  such  tokens  producible  readily,  there  would  be  no 
lack  of  them  to  meet  every  obligation  that  might  fall  due. 

The  foundation  of  our  money  now  is  the  credit  of  the  United 
States  Government.  An  asset  currency  would  give  it  as  a 
foundation  the  credit  of  all  the  owners  of  property  in  the  coun- 
try, which  is  better  than  the  government,  because  the  govern- 
ment is  only  the  ability  to  tax  that  property,  and  the  property 
itself  is  certainly  more  valuable  than  the  ability  to  tax  it. 

A  currency  based  on  lumps  of  stored  gold  is  a  currency  based 
on  the  value  of  that  metal.  A  currency  based  on  stored  iron 
Avould  be  just  as  solid  as  a  gold  currency.  Gold  is  simply  used 
because  its  supply  is  somewhat  uniform  and  its  rarity  makes 
a  small  amount  of  it  valuable.  A  bank  can  store  gold,  but  to 
store  an  equal  value  of  iron  would  require  larger  quarters. 
Gold  in  itself,  aside  from  its  value  as  money,  is  intrinsically  less 
valuable  than  iron.  A  currency  founded  on  iron,  or  on  lead,  or 
on  silver,  if  universally  followed  would  be  as  useful  as  a  gold  cur- 
renc3^  Any  currency,  however,  founded  on  one  material,  like 
gold,  is  full  of  hardships,  because  when  gold  is  discovered  in  great 
quantities,  as  in  the  last  ten  years,  its  value  decreases,  because  it 


BUSINESS  IS  BUSINESS  231 

is  more  plentiful.  Imagine  gold  suddenly  becoming  as  plentiful 
as  iron,  and  the  dream  of  the  miner  is  to  discover  the  mother 
source  of  gold,  in  which  case  it  would  be  as  plentiful.  It  would 
lose  its  value  immediately.  Dollars  would  not  buy  what  pen- 
nies buy  now.  To-day  prices  are  seemingly  iiigher  than  for- 
merly, partially  due  to  more  gold  being  found.  Winle  the  dol- 
lar remains  a  dollar,  the  man  with  twenty  pounds  of  iron,  for 
instance,  will  not  sell  it  for  less  than  a  dollar,  whereas  formerly 
he  would  sell  twenty-five  pounds  of  iron  for  a  dollar 
in  gold. 

The  only  scientific  currency  is  one  based  not  on  one  metal  or 
material  alone,  but  one  based  on  all  materials  and  metals.  To 
give  business  men's  notes  convertibility,  and  instead  of  circu- 
lating them  and  selling  them  like  so  many  bushels  of  wheat,  to 
have  a  portion  of  them,  or  all,  deposited  at  one  point  and  used  as 
the  basis  for  currency,  would  be  to  make  the  standard  of  value, 
on  which  that  currency  was  based,  a  standard  including  all 
forms  of  value.  This  would  be  a  true  currency,  and  being 
backed  by  the  business  assets  of  all  the  banks  with  the  credit  of 
the  government  behind  that,  would  make  an  ideal  currency,  one 
perfectly  elastic  and  suited  to  the  needs  of  business.  Panics 
could  not  then  arise.  A  governmental  tax  on  money  in  circula- 
tion higher  than  the  tax  on  property  would  drive  currency  out 
of  existence  when  it  was  not  needed,  without  preventing  its  com- 
ing into  existence  again  when  more  currency  was  needed  to 
conduct  the  actual  transactions  of  business  life.  It  would  be  a 
system  far  more  stable  than  the  present  one,  in  which  every  bit 
of  commercial  paper  is  always  under  suspicion,  is  not  converti- 
ble and  represents  a  source  of  friction  between  the  bank  and 
the  borrower  at  all  times  with  possibilities  of  a  panic  at  any  mo- 
ment. There  is  no  confidence  in  our  present  system  by  those 
who  know  anything  about  it,  because  they  know  that  it  is  based 
on  the  inflated  values  of  stock  exchange  securities.  Thus  if 
all  depositors  want  their  money  at  once  they  cannot  get  it.  They 
should  be  able  to  but  they  cannot  because  the  credit  of  the 
country  depends  on  the  ability  and  willingness  of  the  managere 
of  corporations  to  repurchase  stocks  in  their  companies.  Their 
inability  or  disinclination  to  do  this  will  at  any  time  plunge  the 
country'  into  a  panic. 

All  our  business  men  are  thus  at  the  mercy  of  Wall  Street, 
but  with  an  asset  currency  which  could  be  readily  ex- 
panded, everybody  could  have  his  money  at  any  time  he  wanted 


232  THE  PRICE  OP  INEFFICIENCY 

it.  The  fact  that  it  was  taxed  by  the  government  in  the  form 
of  taxation  on  the  notes  on  which  it  rested,  would  cause  the 
makers  of  the  notes  to  redeem  them  as  rapidly  as  consistent 
with  conditions  and  not  to  issue  them  unless  required  to  do  so, 
and  this  would  automatically  draw  the  actual  currency  back 
into  the  banks  and  to  physical  destruction  as  bits  of  paper,  keep- 
ing values  at  all  times  out  of  the  form  of  currency  and  in  the 
form  of  property  and  other  assets,  except  such  proportion  as 
might  actually  be  required  for  daily  transactions. 

With  the  possibility  of  the  banks  loaning  to  local  depositors, 
the  small  business  man  would  have  at  his  command  the  same 
degree  of  credit  which  is  now  monopolized  by  the  trusts.  Busi- 
ness would  revive  amazingly  and  every  bit  of  capital  in  the 
country  could  be  used  in  developments,  instead  of  being  tied  up 
as  it  largely  is  at  present. 

The  organization  of  banks,  however,  is  carried  out  in  a  thor- 
oughgoing spirit  of  monopoly  which  will  not  be  upset  without 
great  difficulty.  They  are  a  kind  of  impudent  band  of  leeches 
grown  fat  by  manipulation  and  skimming  of  interest  and  other 
devices  and  they  are  an  incubus  on  the  prosperity  of  the  country 
instead  of  the  help  that  they  should  be. 

Particularly  dangerous  are  the  consolidated  banks  which  ac- 
quire great  power  through  tlieir  enormous  holdings.  Their  dis- 
integration or  unscrambling  is  a  duty  which  the  public  owes  to 
itself  to  perform  without  delay. 

As  an  example  of  how  great  a  profit  the  banks  may  make  out 
of  a  very  small  item  of  their  operation,  may  be  cited  the  collec- 
tion charge  on  checks  passing  from  city  to  city.  It  was  brought 
out  in  the  1912  hearings  of  the  Congressional  Committee  investi- 
gating the  money  trust  that  the  banks  of  New  York  derive  a  rev- 
enue of  some  $50,000,000  a  year  out  of  the  charges  made  for  col- 
lecting checks,  practically  the  sum  they  pay  out  in  dividends. 
Although  in  any  individual  case  the  amount  of  the  collection  is 
small,  j^et  in  the  aggregate  the  absorption  of  this  much  value 
from  the  channels  of  commerce  is  a  serious  and  indefensible 
drain. 

Banks  are  given  to  small  pluckings  not  much  noticed  by  those 
plucked,  but  profitable  in  the  aggregate.  The  charging  of  $2.00 
a  month  for  "carrying  the  account"  of  small  depositors,  one 
who  maintains  a  balance  of  less  than  $200,  is  one  of  the  profit- 
able little  side  grafts  of  banking.  In  fact  the  whole  subject 
of  banking  is  one  of  many  ramifications  far  beyond  the  scope  of 


BUSINESS  IS  BUSINESS  233 

this  volume.  The  sudden  rise  to  positions  of  financial  impor- 
tance of  many  young  men  in  the  banking  world  is  an  evidence 
of  the  fine  art  of  blackmail  which  thrives  nowhere  as  in  the 
world  of  finance,  where  slight  deviations  from  the  legal  path 
on  the  part  of  high  officials  provide  the  foothold.  "With  such 
men  in  such  positions  of  power  it  is  little  to  be  wondered  at  that 
the  banking  system  is  one  in  which  the  position  of  the  public 
is  not  dissimilar  to  that  of  a  picked  chicken. 

The  ability  of  the  public  which  it  should  have,  to  use  its  money 
in  any  direction,  free  of  the  domination  of  Wall  Street,  would 
enable  the  establishment  in  this  country  of  banks  similar  to  those 
in  Germany  for  promotion  purposes. 

The  conduct  of  the  treasury  department  of  the  United  States 
has  been  contrary  to  the  interest  of  the  public  and  in  favor  of 
Wall  Street.  The  national  banking  system  is  partially  to  blame 
for  this,  as  banlvs  are  the  avenues  w^hereby  the  government  reaches 
the  public ;  and  banks  are  not  under  governmental  control. 

While  the  citizen  can  lend  the  government  money,  by  the  pur- 
chase of  government  bonds,  the  government  cannot  directly  lend 
the  citizen  money,  and  there  are  times  when  governmental  lending 
is  essential  to  the  welfare  of  the  country.  In  the  panic  of  1907 
in  order  to  prevent  a  great  collapse  of  banks  in  New  York,  the 
government  deposited  many  millions  of  its  reserves  in  New  York 
banks.  This  was  unknown  to  the  public,  but  the  money,  through 
the  avenues  of  great  financial  houses,  was  placed  at  the  disposal 
of  the  members  of  the  stock  exchange  at  an  enormously  usurious 
rate  and  the  day  was  saved  and  a  noted  financier  was  given  credit 
for  saving  the  country.  Under  proper  banking  laws  in  Avhich  the 
government  might  lend  direct  to  borrowers  instead  of  having  to 
put  its  money  into  banks  and  having  no  control  of  the  use  to 
which  it  is  then  put,  save  the  privilege  of  withdrawing  it,  such 
an  outrageous  farce  would  be  impossible  and  the  financiers  instead 
of  wearing  halos  of  glory  and  reaping  huge  harvests  of  interest, 
would  be  left  to  the  last,  in  case  of  such  necessity,  like  rats 
on  a  sinking  ship,  and  the  real  business  men  of  the  country 
saved  first. 

The  banker  and  broker  are  essentially  middlemen  of  monetary 
dealings,  but  they  are  in  such  a  position  of  advantage  that  they 
reap  a  large  percent  of  the  fruit  of  the  labors  of  others  without 
sowing  themselves.  They  are  monopolists  of  the  avenues  of  dis- 
tribution of  money  and  credit  and  the  government  must  place  its 
money  with  them  if  the  public  is  to  gain  any  advantage.     It  has 


234  THE  PRICE  OF  INEFFICIENCY 

no  other  means  of  placing  its  surplus  funds  at  the  disposition  of 
the  public. 

The  government  could  retain  its  funds  in  its  vaults  and  that 
has  recently  been  done  to  a  greater  extent  than  usual,  but  such  a 
course  while  it  hurts  the  broker,  hurts  the  business  man  more. 
It  is  as  if  the  cook  refused  to  deliver  the  dinner  to  the  waiter 
to  prevent  him  from  stealing  the  tid-bits  en  route  to  the  patron. 
Although  the  waiter  broker  is  inconvenienced,  the  patron  suffers 
a  greater  degree  of  starvation. 

The  accumulation  thus  of  a  great  "dead  mass  of  currency"  in 
the  government's  vaults  is  nothing  short  of  an  economic  crime. 

A  surprising  negligence,  too,  is  shown  by  the  government  in 
its  relations  with  the  banks  which  are  depositors  of  the  govern- 
ment funds,  for  such  institutions  do  not  have  to  pay  the  govern- 
ment interest,  nor  do  they  have  to  maintain  a  high  reserve. 

"What  actually  happens  when  a  bank  receives  a  great  govern- 
ment deposit  is  that  the  loan  clerk  of  the  bank  telephones  the 
loan  clerk  of  a  brokerage  house  that  they  have  such  a  sum  to  lend, 
at  a  rate  of  interest  which  is  fixed  by  the  bank.  The  transaction 
is  immediately  concluded  for  the  next  day,  such  transaction  being 
regularly  carried  out  on  one  business  day  for  deliveries  the  next 
day ;  the  broker  gets  his  check  and  the  bank  accepts  as  collateral 
the  stocks  of  the  big  corporation  or  trusts  as  security.  Some- 
times the  bank  and  the  broker  deal  through  an  intermediary 
known  as  a  loan  broker,  who  does  the  telephoning,  or  who  chases 
from  broker's  office  to  broker's  office  making  the  arrangements 
for  a  very  small  rake-off  or  the  loaning  may  be  done  on  the  floor 
of  the  stock  exchange  itself,  especially  if  it  is  late  in  the  day. 
Such  loans  are  usually  for  $100,000  each,  though  often  for 
$250,000,  and  are  made  with  a  degree  of  convenience  and  celerity 
unmatched  in  ordinary  business  life.  The  government's  money, 
as  well  as  any  other  money  on  deposit  in  banks,  thus  slides  as  if 
on  greased  rails  directly  into  Wall  Street  where  the  speculators 
who  congregate  to  buy  and  sell  in  the  brokers'  offices  may  with 
the  utmost  facility  borrow  it  again  from  the  brokers  to  buy  stocks 
with,  in  the  corporations  that  crush  the  business  man,  who  if  he 
desires  to  borrow  $5,000  or  $10,000  even,  must  go  to  great  trouble 
if  not  humiliation  to  get  it,  tliougli  he  liimself  may  borrow  it  from 
a  bi'oker's  office  to  buy  stocks  with,  with  the  greatest  of  ease. 

Tlie  government  has  lost,  it  is  estimated  by  officials, 
$100,000,000  in  the  last  25  years  in  interest  on  money  placed  in 
depository  banks,  if  interest  be  only  figured  at  2%,  a  low  but  fair 


BUSINESS  IS  BUSINESS  235 

rate  since  the  funds  are  withdrawable  on  demand.  The  banks, 
however,  have  under  very  rare  circumstances  ever  loaned  any 
money  at  less  than  2%,  and  as  they  loan  a  large  part  of  their 
money  on  time  loans  at  higher  rates  and  occasionally  on  demand 
or  call  loans,  on  which  the  money  must  be  returned  on  one  day's 
notice,  at  from  3  to  4%  ordinarily  and  from  that  up  to  20,  40, 
60  and  75%  and  higher  occasionally,  with  very  little  risk  of  the 
government  withdrawing  its  funds  suddenly,  the  banks  have  thus 
profited  not  less  than  $250,000,000  during  the  25  years,  or  some 
ten  millions  a  year  on  this  one  small,  unnoticed  item,  a  sura 
which  would  match  the  philanthropies  of  even  a  Carnegie,  a 
Rockefeller  or  a  JMorgan  if  devoted  to  the  public's  good  instead 
of  to  the  banks. 

Thomas  A.  Edison  in  an  interview,  after  his  recent  return 
from  Europe,  in  the  Neiu  York  Times,  copj^righted  b}'  the  Pub- 
lisher's Press,  and  written  by  Edward  ]\Iarshall,  points  out  the 
advantage  of  this  feature  of  German  banking. 

"One  great  advantage  which  the  manufacturers  of  Germany 
have  over  us  and  over  every  other  countrv^  is  to  be  found  in 
her  great  promoting  banks.  In  the  United  States,  a  man  who 
wishes  to  get  something  new  on  the  market,  must  get  hold,  in 
one  way  or  another,  of  a  promoter  of  his  enterprise,  and  our 
promoters  are  notoriously  irresponsible.  There,  inventions  are 
brought  out  by  promoting  banks. 

"For  instance,  the  Deutscher  Bank,  which  in  the  first  place 
is  one  of  the  largest  banks  in  the  world,  has  a  corps  of  engineers 
and  auditors  ready  to  investigate  every  phase  of  any  proposed 
invention.  If  the  invention  which  is  taken  to  them  proves,  after 
the  most  careful  investigation,  likely  to  be  useful  and  profitable, 
the  money  is  forthcoming.  The  financial  and  technical  investi- 
gation is  rigid  to  the  last  degree,  but  if  the  idea  stands  the  test, 
the  capital  is  ready. 

"The  same  plan  can  be  followed  by  a  manufacturer  who 
wishes  to  extend  his  business.  If  he  can  prove  that  he  can  do  so 
profitably,  he  can  get  the  money  for  the  purpose  from  the  bank 
at  a  reasonable  interest  and  very  promptly.  It  saves  time  and 
keeps  him  from  the  clutch  of  that  particular  breed  of  sharks, 
who  in  this  country  would  be  likely  to  make  a  prey  of  him. 

"The  bank,  then,  will  watch  the  progress  of  the  invention  or 
of  the  manufactory,  will  place  its  stock  on  the  Exchange,  and, 
when  it  reaches  a  certain  point  of  prosperity,  will  take  its  money 
back,  charging  only  a  fair  profit  for  its  use,  and  leaving  the  in- 


236  THE  PRICE  OF  INEFFICIENCY 

ventor  or  manufacturer  with  his  invention  or  his  factory  ready- 
to  go  ahead  with  it  alone. 

"This  is  an  enormous  encouragement  to  the  inventive  faculty 
of  Germany,  and  I  predict  that  it  will  soon  put  the  German 
nation  in  advance  of  us  in  the  origination  and  development  of 
new  mechanical  ideas." 

Promotion  in  America,  as  Mr.  Edison  indicates,  is  certainly 
carried  on  in  an  irresponsible  manner. 

The  promoter  usually  demands  an  extortionate  proportion  of 
the  capital  secured,  and  in  many  instances  the  promoter  exists 
solely  by  getting  advances  in  fees  from  those  looking  for  capital, 
without  ever  securing  the  desired  money  for  the  enterprise. 
Many  companies  are  floated  by  promoters,  knowing  that  they 
can  never  succeed  and  the  promoter  thus  fleeces  the  public  and 
the  original  owner  of  the  project. 

The  government  has  lately  found  a  means  of  stripping  the 
notoriously  fraudulent  promoters  of  their  powers,  and  in  many 
cases  of  their  liberties,  through,  a  law  which  prescribes  penalties 
for  using  the  mails  to  defraud,  but  the  post  office  department,  to 
effect  these  results  has  been  given  dangerous  powers,  which  are 
subject  to  abuse,  and  in  addition  to  having  the  potentiality  of 
evils  worse  than  are  cured,  places  those  prosecuted  in  the  light 
of  martyrs.  Animus  is  ascribed,  and  the  use  of  the  mail  has 
been  declared  by  the  highest  courts  a  privilege  withdrawable 
by  the  department  and  not  a  right  of  the  citizen.  A  means  of 
reaching  fakirs  without  such  tremendous  executive  power  should 
be  found,  as  the  agents  of  the  department  carry  out  the  law  in 
the  most  sensational  manner  possible,  bringing  it  further  into 
disrespect  by  sudden  raids  upon  suspected  parties. 

A  spectacular  arrest,  with  struggling  prisoners,  a  gaping 
crowd,  axes,  patrol  wagons,  broken  doors  and  furniture  and 
other  stagey  accompaniments,  is  one  of  the  specialties  of  Amer- 
ican administration  of  justice.  In  Russia,  an  officer  who  can- 
not effect  an  arrest  without  a  disturbance  is  discharged.  It  is 
there  usually  only  necessary  to  let  the  accused  know  that  he  is 
wanted.  He  has  respect  enough  for  the  law  to  come  when  he 
is  invited.  In  America  the  culprit  has  so  little  respect  for  the 
law  as  to  often  engage  in  a  physical  struggle  with  the  arresting 
officer.  This  is  a  picture  of  legal  inefficiency  and  explains  much 
of  America's  lawlessness.  Having  no  respect,  and  properly  so, 
for  most  of  the  legislatures,  the  culprit  feels  that  his  liberties 
are  being  invaded,  which  they  often  are,  as  is  proved  by  the 


BUSINESS  IS  BUSINESS  237 

highly   numerous   collection   of   laws   decided   unconstitutional, 
after  citizens  have  been  arrested  and  tried  under  them. 

The  underlying  cause  of  spectacular  arrests  is  political. 
Flourishes  of  this  kind  are  supposed  to  impress  the  public  with 
the  thoroughness  of  the  party  in  power.  The  administration  of 
the  police  is  a  matter  of  politics  and  the  head  of  the  department, 
who  very  seldom  has  any  previous  experience  in  police  work, 
feels  the  necessity  of  showing  the  public  what  it  is  getting  for 
the  money  it  is  paying.  Usually  the  gamblei*s,  pool  room  men 
and  resort  keepers  are  made  the  victims,  since  no  one  will  feel 
disposed  to  defend  them.  The  police  thus  gain  a  little  cheap 
advertising,  and  a  certain  amount  of  public  opinion  is  formed, 
at  least  as  affects  those  who  do  not  see  further  than  the  ends  of 
their  noses.  As  there  are  many  of  this  sort,  whatever  is  sen- 
sational ard  spectacular,  has  a  certain  effect. 

Ulterior  motives  so  often  are  back  of  enforcements  of  the 
law  as  to  render  it  still  less  worthy  of  respect.  Certain  busy- 
bodies  make  their  living  by  getting  up  societies  to  enforce  cer- 
tain laws.  Rich  people  contribute  to  such  societies  and  in  order 
to  secure  further  contributions,  the  professional  salaried  re- 
former must  show  a  certain  degree  of  activity.  Rescue  homes 
for  women,  societies  for  preventing  various  cruelties  and  vices 
flourish,  wdth  consequent  frequent  miscarriages  of  justice,  and 
the  postal  laws  are  often  found  a  very  useful  medium  for  the 
reformer's  activity.  A  characteristic  incident  of  this  kind  was 
seen  in  the  case  of  Oscar  Krueger,  for  whom  President  Taft 
issued  a  pardon  on  Jan.  19,  1912,  as  told  in  the  news  dispatches 
as  follows: 

' '  President  Taft  granted  to-night  a  pardon  to  Oscar  Krueger, 
a  New  York  plasterer,  who  has  been  serving  a  term  of  eighteen 
months  in  the  Atlanta  Penitentiary  on  the  charge  of  sending 
improper  matter  through  the  mails.  The  pardon  followed  rec- 
ommendation of  District  Attorney  Wise  of  New  York  of  the  De- 
partment of  Justice,  on  the  theorj'  that  Krueger  was  \\Tougfully 
convicted  last  February,  as  investigation  having  convinced  the 
Department  of  Justice  that  the  accused  did  not  write  the  offen- 
sive letters. 

"The  Department's  version  of  the  case  is  that  a  respectable 
young  woman  in  New  York  advertised  for  a  place  and  received 
a  letter  in  response,  which  was  considered  improper.  Anthony 
Comstock  got  possession  of  the  letter  and  inserted  a  decoy  ad- 
vertisement, arranging  for  an  appointment.     The  young  woman 


238  THE  PRICE  OF  INEFFICIENCY 

went  to  the  place,  found  no  one  there,  but  looking  around  saw 
a  man  in  the  neighborhood,  and  asked  him  whether  his  name 
was  'Ed,'  the  password  for  the  meeting. 

"Krueger  was  the  man  whom  she  met,  but  denied  that  his 
name  was  'Ed,'  explaining  afterward  that  he  said  it  was  for 
a  joke.  He  denied  that  he  had  written  any  letter.  The  Depart- 
ment of  Justice  compared  Krueger's  handwriting  with  that  of 
the  letter  and  was  satisfied  that  he  had  not  written  the  missive. ' ' 

The  formation  of  "public  opinion"  is  achieved  in  many- 
devious  ways  in  the  United  States,  and  very  largely  by  those 
who  have  some  sort  of  ax  to  grind,  generally  unknown  to  the 
public. 

Some  newspapers  grind  their  axes  not  only  in  the  editorial 
columns,  but  most  dangerously  in  the  news  columns  and  chiefly 
among  the  expedients  are  the  concocted  interview  and  the  mis- 
leading headline.  A  striking  yet  artistic  example  of  newspaper 
ax  grinding  was  accomplished  by  the  New  York  World,  when 
Thomas  A.  Edison  was  made  to  do  duty  for  its  German 
ax,  and  a  sorry  figure  the  venerable  inventor  was  made  to 
show. 

On  leaving  Hamburg,  where  he  had  received  many  courtesies, 
an  interview  was  cabled  to  the  World  by  its  own  special  corres- 
pondent traveling  with  Edison,  which  included  the  following: 

"There  is  something  wrong  with  the  German  aesthetic  lobe. 
They  feed  their  brains  too  much  on  beer,  and  the  result  is  beer 
architecture.  The  only  dignified  buildings  I  have  seen  are 
copies  of  the  Greek  and  Roman.  In  architecture  as  in  all  else, 
the  Germans  lack  proper  initiative;  they  are  good  adapters, 
that's  all. 

"Another  thing  that  handicaps  German  progress  is  their  over- 
economy.  They  grudge  spending  money,  and  if  a  new  machine 
comes  out,  the  German  will  not  buy  it  until  he  has  used  up  the 
old  one. 

"Where  American  intelligence  comes  in,  is  in  the  willingness 
to  spend  money  when  necessary.  There  is  no  short-sighted 
penny-saving  among  our  business  men. 

"One  hears  great  talk  about  the  high  standard  of  business  in 
Germany,  yet  at  luncheon  the  other  day  with  German  financiers 
they  admitted  there  is  no  comparison  between  English  business 
standards  and  their  own. 

"The  Englishman's  is  the  highest  standard  of  integrity  in 
the  world,"  Edison  is  made  to  say  that  he  was  told.     "Our  Ger- 


BUSINESS  IS  BUSINESS  239 

man  aristocrats  are  entering  largely  into  business  now  to  get 
rich  quick,  and  tliey  don't  care  how  it  is  done.  Their  methods 
have  affected  business  ideals  generally. 

"It  is  my  own  opinion  that  the  English  are  the  highest  type 
physically  and  mentally  over  here,"  the  great  inventor  went  on. 
"I  do  not  believe  in  the  talked-of  industrial  world-dominance 
of  Germany. 

"We  have  nothing  to  learn  from  her  and  she  has  much  to 
learn  from  us." 

This  was  published  in  the  morning  edition  of  Sept.  29,  1911, 
and  in  the  afternoon,  the  Neiv  York  Glohc  answered  it  as  follows, 
not  being,  as  it  would  appear  from  the  opening  sentence,  too 
well  convinced  of  its  contemporary's  accuracy. 

"Did  Mr.  Edison  really  say,  as  the  ^Vorld  makes  him  say, 
that  "in  architecture,  as  in  all  else,  the  Germans  lack  proper 
initiative;  they  are  good  adapters,  that's  all?"  Somehow  this 
does  not  sound  like  an  exact  likeness  of  the  Germans.  Translate 
Mr.  Edison's  general  statement  into  particular  statements,  and 
the  result  looks  rather  queer. 

"In  music  the  Germans  lack  proper  initiative.  They  are 
merely  good  adapters.  Richard  Wagner  was  a  good  adapter; 
that's  all.  The  same  thing  is  true  of  Richard  Strauss.  Tu 
statecraft  and  war,  Germans  lack  proper  initiative.  Examples, 
Bismarck  and  Moltke.  In  philosophy  they  are  nothing  but 
good  adapters.  See  the  works  of  Immanuel  Kant,  passim. 
Goethe  lacked  proper  initiative  in  dramatic  poetry,  lyric  poetry, 
natural  science,  criticism  and  Ichensiveisheit. 

"Even  if  we  confine  ourselves  to  our  outi  day  and  to  the  sin- 
gle province  of  poetry,  IMr.  Edison's  assertion  is  just  as  wide 
of  the  mark.  We  suppose  most  Germans  would  say  their  most 
eminent  living  poets  were  Richard  Dehmel  and  Stefan  George. 
It  is  conceivable  that  INIr.  Edison  may  hear  nothing  but  the 
echoes  which  undoubtedly  make  up  part  of  George's  talent,  that 
he  may  be  deaf  to  the  equally  undoubted  originality,  but  can 
IVlr.  p]dison  or  anyone  else  seriously  maintain  that  Dehmel  is  a 
mere  adapter  without  initiative?" 

On  October  1st,  the  World  published  a  letter  from  its  special 
correspondent  traveling  with  Edison,  dated  Dresden,  Sept.  20th, 
in  which  Edison  is  reported  as  having  said: 

"Germany  leads  with  its  industrial  chemistry;  tliere's  no 
people  that  can  touch  it  in  that  important  branch.  The  German 
brain  seems  perfectly  fitted  for  success  in  such  experiments; 


240  THE  PRICE  OF  INEFFICIENCY 

they  leave  all  other  countries  behind  in  their  magnificent  initia- 
tive in  that  line." 

While  Edison  found  that  the  esthetic  lobe  of  the  German 
brain  is  too  much  fed  on  beer,  with  the  terrible  result  of  beer 
architecture,  it  is  evident  that  they  have  magnificent  initiative 
in  chemistry,  whether  on  account  of  beer  or  in  spite  of  it  does 
not  appear. 

The  question  of  beer  drinking,  for  which  Germany  is  so  fa- 
mous, needs  a  little  consideration  on  its  own  account.  Beer 
drinking  in  Germany  is  carried  on  in  such  an  open  manner  that 
it  forces  itself  upon  the  attention  of  visitors.  But  the  quantity 
of  beer  consumed  in  the  United  States  in  1910  was  1,851  million 
gallons  against  1,704  million  gallons  in  Germany,  making  20.09 
gallons  per  capita  in  the  United  States  against  26.47  per  capita 
in  Germany.  In  the  United  States,  however,  there  are  nine  dry 
states,  882  dry  counties  and  6,994  dry  towns  against  none  in 
Germany,  and  as  it  is  more  convenient  to  drink  distilled  spirits 
in  the  so-called  dry  states,  counties  and  towns,  the  remaining 
states  of  the  Union  easily  lead  in  beer  consumption  per  capita 
as  compared  with  Germany.  American  beer,  in  addition,  con- 
tains twice  as  much  alcohol  as  German  beer  as  consumed  in  Ger- 
many, therefore  the  American  consumption  of  alcohol  in  beer 
is  twice  as  much  as  German  consumption.  The  German  can 
thus  drink  two  glasses  of  beer  to  the  American's  one  with  no 
more  inconvenience.  He  thus  seems  to  be  a  large  beer  drinker 
but  in  reality  consumes  only  half  as  much  of  the  intoxicating 
principle  as  the  American  does. 

The  distilled  spirits  consumption  of  the  United  States  in  1910 
was  134.6  million  gallons,  which  is  more  than  ten  millions  more 
than  the  German  consumption.  Further,  American  whiskey 
is  50%  stronger  than  German  whiskey,  as  newly  arriving  Ger- 
mans quickly  find  out,  to  the  amusement  of  bar  tenders  and 
waiters  who  first  serve  them,  and  to  their  own  eye  opening 
surprise. 

And  a  large  proportion  of  American  whiskey  is  not  the  real 
thing,  but  a  doctored  composition  of  nobody  knows  what.  If 
German  architecture  is  beer  architecture,  American  architecture 
should  be  rot  gut  architecture. 

On  Mr.  Edison's  arrival  in  New  York,  having  shed  his  special 
correspondent  with  other  impedimenta  of  his  journey,  he  denied 
to  the  assembled  reporters  many  of  the  statements  that  had  been 
attributed  to  him.     The  World  of  October  8th,  however,  in  order 


BUSINESS  IS  BUSINESS  241 

to  save  its  face,  headed  its  interviews:  "Edison  Stands  by  What 
He  Said  About  Germans."  In  the  article  the  following  ap- 
peared : 

"I  gave  the  reporter  who  was  \nth  mo  all  the  time,  a  lot  of 
'dope.'  " 

And  the  World  in  passing  the  "dope"  along,  stated  further: 

"I  had  no  means  of  knowing  what  the  report  did  say  until 
I  saw  this  interview.  I  said  that  what  the  Germans  themselves 
acknowledged  was  that  the  integrity  of  their  commercial  classes 
was  not  as  high  as  that  of  the  English. 

"They  admitted  it  themselves. 

"I  had  to  take  their  own  word  for  it.  I  had  no  means  of 
knowing  the  standard  of  integrity  of  the  German  business 
classes.  I  will  say  personally  that  I  believe  the  Germans  entirely 
honest,  the  most  honest  in  the  w^orld.  I  have  had  them  in  my 
laboratories  all  my  life. 

"I  think  Germany  is  the  most  advanced  nation  in  Europe. 
She  has  a  million  factories  and  is  building  more  and  more  all 
the  time,  and  growing  more  and  more  prosperous. 

"When  a  German  sells  $100  worth  of  goods,  they  weigh 
about  30  pounds;  when  a  Frenchman  sells  $100  worth,  they 
■U'Cigli  400  pounds,  and  when  an  Englishman  sells  $100  worth 
of  goods,  they  weigh  half  a  ton. ' ' 

As  to  the  integrity  of  German  business  men  and  the  state- 
ments made  to  him  by  the  Germans  themselves;  although  not  so 
reputed  in  America,  the  German  is  in  reality  a  very  polite  per- 
son. In  Spain,  the  visitor  has  but  to  praise  an  object  to  be  in- 
formed that  it  is  his,  while  in  Germany  if  the  visitor  deprecates 
any  condition  of  his  owna  country,  the  German  will  declare 
something  similar  in  Germany  to  be  much  worse,  whether  it  is 
or  not.  The  statement  that  German  business  honor  is  inferior 
to  English  was  probably  made  to  comfort  Edison  on  American 
trusts. 

In  an  interview  in  the  New  York  Times  of  October  22,  1911, 
Mr.  Edison,  speaking  of  the  German  appetite  says: 

"At  German  restaurants,  the  general  tendency  toward  over- 
eating is  a  painful  sight  to  witness,  really.  Americans,  as  a 
rule,  I  have  observed,  eat  about  twdce  as  much  as  they  need; 
Germans  eat  twice  as  much  as  Americans,  which  is  four  times  as 
much  as  they  need.  The  prosperity  of  the  German  nation  is  in 
spite  of  the  most  extraordinary  overeating.  And  a  people  who 
take  into  their  systems  every  day,  75%  more  food  than  is  neces- 


242  THE  PRICE  OF  INEFFICIENCY 

saiy  to  give  the  proper  strength  and  weight  must  necessarily 
suffer  from  it. 

"I  made  an  interesting  but  necessarily  crude  calculation  in 
Germany.  If  Germany  ate  as  much  as  she  ought  to,  she  could 
export  food  products  instead  of  importing  them  at  the  rate  of 
$2,000,000,000  annually.  She  pays,  therefore,  far  more  than 
$2,000,000,000  every  year  for  the  food  which  she  consumes  in 
plain  excess  of  her  needs. 

' '  This,  in  an  era  of  prosperity  along  most  scientific  and  com- 
mercial lines,  is  a  startling  contradiction,  an  astonishing  instance 
of  extravagance  and  foolishness  in  the  midst  of  careful  econo- 
mies and  common  sense. 

"She  eats  far  too  much,  but  she  drinks  with  a  more  reckless 
absurdity  than  she  eats.  Her  tremendous  consumption  of  beer, 
wine  and  high  alcoholic  ciders,  is  appalling.  It  hurts  her  peo- 
ple mentally  and  physically  and  hurts  the  nation  economically." 

As  to  the  overeating,  it  is  quite  possible  that  Germans  in  pub- 
lic eat  more  than  in  private,  as  is  the  case  in  America.  In  New 
York,  for  example,  there  are  numerous  popular  restaurants 
which  are  patronized  by  a  transient  class.  New  Yorkers  enter- 
tain their  visitors,  and  on  particular  occasions  go  out  to  eat  at 
these  restaurants.  Although  they  are  always  filled,  the  patron- 
age is  not  the  same  crowd  night  after  night.  One  such  meal  will 
upset  the  average  digestion  for  a  week.  With  the  Germans  the 
same  is  true,  so  that  the  eating  that  is  seen  in  public  restaurants 
is  by  no  means  an  index  of  the  actual  amount  of  food  consumed 
under  normal  circumstances.  However,  it  is  customary  with  all 
Germans  to  eat  five  times  a  day.  Even  manufacturing  concerns 
during  working  hours  are  compelled  by  law  to  allow  employees 
three  periods  for  eating  which  are  in  addition  to  their  meals  be- 
fore and  after  working  hours. 

As  the  consumption  in  America  of  malt  and  alcoholic  liquors 
is  greater  than  in  Germany,  and  as  the  alcoholic  liquors  are  50% 
stronger  in  America,  Mr.  Edison's  admonitions  are  more  appli- 
cable to  America  than  to  Germany.  Only  in  wine  consumption, 
mostly  taken  with  meals,  is  Germany  in  excess  of  America.  The 
German  cannot  understand  a  three  dollar  dinner  with  water  on 
the  side.  "Water,  although  filtered  in  Germany  and  without 
river  ice,  is  believed  to  be  best  suited  for  ablutions. 

In  America  drinking  is  not  carried  on  as  frankly  as  in  Ger- 
many and  is  only  witnessed  by  those  who  go  into  the  bars  to 
drink   themselves,    although   the  parade   of  "souses"   is   more 


BUSINESS  IS  BUSINESS  243 

noticeable  in  America.  If  eight  persons  enter  a  bar  room,  as  a 
rule  good  fellowship  requires  a  treat  all  around,  which  means 
sixty-four  glasses  all  told.  Even  if  the  later  ones  are  only  beer 
in  whiskey  or  champagne  glasses,  for  the  benefit  of  those  who 
can  no  longer  lift  the  heavier  receptacles  and  the  saloon  owner, 
there  is  still  an  appreciable  quantity  consumed.  In  America 
when  the  suffragettes  come  fully  into  their  own,  and  eight  visit 
a  soda  fountain,  6-1  ice  cream  sodas  will  then  be  customarily 
served. 

It  would  appear  that  the  World  succeeded  more  or  less  in  em- 
broiling Germany  and  Edison,  and  placing  the  latter  in  a  veiy 
ridiculous  light.  The  criticisms  which  he  was  credited  with  did 
not  injure  Germany,  as  they  were  obviously  ill-considered,  but 
the  interviews  had  the  effect  of  making  Edison  belittle  himself. 

Emperor  William  makes  every  effort  to  receive  distinguished 
American  visitors,  and  the  failure  of  Edison,  the  most  noted 
inventor  in  the  world,  to  meet  him,  may  have  been  due  to  these 
newspaper  inventions. 

Mr.  Edison  may  have  came  in  contact  with  a  phase  of  the 
system  described  by  Mr.  Charles  Edward  Russell  in  "German- 
izing the  World,"  in  the  Cosmoyolitan  Magazine  of  January, 
1906: 

"A  hostile  or  critical  correspondent  finds  in  Germany  the 
avenues  of  information  gently  but  firmly  closed  against  him. 
So  quietly  is  this  done  that  the  unfortunate  man  is  slow  to  be- 
lieve that  he  is  really  boycotted,  and  so  effectively  that  he  can 
get  nothing  he  wants." 

In  order  to  show  the  real  opinion  which  Mr.  Edison  formed 
on  his  visit,  and  to  do  justice  to  him,  the  following  extracts  from 
interviews  with  him  in  the  New  York  Times  of  October  22nd, 
and  29th,  1911,  from  which  we  quote  by  courtesy  of  the  Publish- 
ers' Press,  show  at  once  the  facts  in  the  case  and  the  many 
things  that  Americans  can  learn  abroad. 

"The  Germans  have  wheat  which  seems  to  show  a  higher 
gluten  content  than  our  own.  W^e  should  investigate  this  care- 
fully. 

"I  looked  into  the  matter  superficially  and  discovered  that 
the  fact  is  well  known  to  the  experts,  so  well  known  that  some 
of  the  best  American  hotels  import  this  wheat  to  have  their  flour 
ground  from  it.  Its  gluten  content  is  so  high  that  people  fed 
on  bread  made  from  this  wheat  do  not  actually  need  meats. 

' '  They  are  careful  in  investigation  of  such  matters  over  there, 


244  .     THE  PRICE  OF  INEFFICIENCY 

and  we  should  be,  but  are  not.     We  don't  seem  to  care.     It  is  a 
pity. 

"They  gave  us  'balanced  bread'  as  a  matter  of  course.  We 
do  not  get  it  in  America.  Over  here  we  take  out  all  the  phos- 
phorus and  certain  other  things  and  unbalance  it. 

"It  no  longer  remains  a  really  normal  human  food,  and  I  be- 
lieve that  to  be  a  bad  thing  for  us.  Beri-beri,  one  of  the  disease 
curses  of  the  Asias,  is  due  to  eating  rice  unbalanced  by  the  re- 
moval of  the  shell. 

"This  has  been  sufficiently  demonstrated,  so  that  the  demon- 
stration of  the  cause  has  pointed  out  the  way  to  certain  cure.  To 
sufferers  from  beri-beri,  they  give  water  in  which  rice  shells  have 
been  boiled,  which  amounts  to  an  essence  of  the  very  properties 
the  lack  of  which  has  caused  the  trouble.     The  sufferers  get  well. 

"There  is  undoubtedly  good  cause  for  a  great  national  food 
reform  movement  in  the  United  States.  I  don't  know  that  the 
white  bread  that  we  eat  is  bad  for  us,  but  I  do  not  believe  that 
it  is  as  good  for  us  as  German  bread  is  for  the  Germans.  I  be- 
lieve that  nature  knows  better  than  we  do,  and  that  we'd  better 
not  unbalance  our  grain  rations. 

"I  saw,"  says  Mr.  Edison,  speaking  of  housing  in  Berlin, 
' '  what  made  me  ashamed  for  my  own  United  States,  I  am  afraid. 
The  workingmen  of  New  York  City  are  not  housed  as  are  these 
Berliners.  What  a  contrast  to  the  dreadful  tenements  which 
disgrace  and  deface  New  York's  crowded  districts. 

"The  buildings  which  these  workingmen  went  home  to  could 
not  properly  be  spoken  of  as  'tenements' — a  term  which  in  this 
country  has  fallen  into  disrepute.  They  may  better  be  referred 
to  as  apartment  houses,  beautifully  constructed,  perfectly  sup- 
plied with  air  and  light,  safe  against  fire  and  made  up  of  large 
and  conveniently  arranged  rooms. 

' '  Each  story  has  its  large  iron  balconies,  and  the  balconies  are 
generally  jammed  with  flowers.  In  this  country,  flowers  or  any- 
thing else  upon  the  balconies  are  violations  of  the  law,  for  they 
might  obstruct  their  use  as  fire  escapes. 

"In  the  German  city,  not  only  are  they  not  forbidden,  but 
are,  I  am  informed,  actually  compulsory,  because  of  the  belief 
that  beauty  helps  to  make  life  pleasant,  and  that  the  pleasant 
life  is  likely  to  be  the  useful  one.  And  the  flowers  upon  them 
do  not  peril  human  life  by  obstructing  them  when  they  are 
needed  for  escapes  from  fire,  for  the  very  simple  reason  they  are 
not  needed  for  escape  from  fire.     These  German  buildings  do 


BUSINESS  IS  BUSINESS  245 

not  burn.  They  are  well  built  of  good  materials  and  really  fire 
proof. 

"I  did  uol  ijo  inside  to  see  the  rixjins,  but  was  informed  that 
the  littlest  apartment  in  tiiem  has  four  rooms,  and  that  most 
of  them  are  live  room  flats,  and  that  they  are  provided  very 
adequately  with  all  the  eonveniencies  of  modern  city  life.  It 
was  a  beautiful  sight  to  see,  in  Berlin,  block  after  block  of  these 
fine,  model,  workingmen's  apartment  houses. 

"The  rentals  are  extremely  moderate,  proportioned  to  the  in- 
comes of  the  men. 

"They  are  doing  great  things  in  Berlin  to  make  the  people 
happy — making  an  incredibly  fine  city  of  the  German  capital. 
I  went  through  many  factories  in  Berlin,  and  its  environs,  and 
after  I  had  finished  my  long  visit  to  one  of  them,  I  stood  outside 
to  watch  the  workmen  as  they  left  it  at  the  end  of  the  working 
day.  I  wanted  to  see  how  they  looked  and  acted,  and  then,  I 
wanted  to  follow  some  of  them  and  see  how  they  were  housed — 
what  sort  of  homes  they  had. 

"The  Germans  are  the  world's  most  persistent  people.  When 
they  start  a  thing,  they  usually  get  it,  and  they  have  started 
now  to  capture  our  mechanical  prestige.  It  will  take  hard  work 
and  intelligent  work  in  the  United  States  to  prevent  them  from 
outstripping  us. 

"I  went  into  the  packing  rooms  of  several  large  German  fac- 
tories, and  there  found  indications  that  their  foreign  trade  is 
larger  than  their  domestic  trade,  which  is  enormous.  They  are 
wonderfully  energetic  and  intelligent.  They  organize  with  sin- 
gular ability  and  extraordinary  patience.  They  have  started  a 
solemn,  unsensational,  but  ruthless,  and  never  slacking  campaign 
for  the  world's  trade,  fighting  us  where  we  oppose  them,  fighting 
England  where  she  has  business  which  they  covet,  pushing 
ahead  everywhere. 

"It  behooves  us  to  take  thought  of  this,  and  watch  them 
closely.  There  is  much  which  we  might  learn  with  profit  in 
their  methods. 

"I  was  informed  in  Germany  that  German  capital  has  estab- 
lished banks  in  all  parts  of  the  world  for  the  purpose  of  assist- 
ing German  merchants  resident  abroad,  so  that  she  not  only 
exports  goods,  but  makes  the  profit  from  their  sale  abroad  and 
furnishes  the  necessary  banking  facilities,  also  highly  profitable, 
through  which  the  business  is  concluded. 

"I  became  interested  with  another  thing — I  believe  I  see  the 


246  THE  PRICE  OF  INEFFICIENCY 

true  inwardness  of  the  Emperor's  naval  policy.  No  one  wants 
war  less  than  he,  no  one  would  do  more  to  keep  out  of  war.  But 
he  considers  a  large  navy  a  good  investment.  The  German  navy 
is  a  commercial  proposition.  The  money  spent  upon  it  is  a  mere 
premium  paid  on  the  insurance  which  it  offers  to  German  capi- 
tal invested  in  remote  spots  of  the  world ;  it  protects  German 
merchants  wherever  they  may  be,  and  assures  them  of  what 
T.  R.  is  fond  of  calling  a  square  deal." 

Mr.  Edison  summarizes  the  difference  which  he  observed  be- 
tween this  country  and  Germany  in  the  following  list  of  items, 
many  of  which  are  of  the  greatest  importance.  Interviews  of 
this  kind  are  much  more  illuminating  and  useful  than  misrepre- 
sentations hot  off  the  cable. 

"German  industries  are  pushing  ahead  faster  than  ours,  and 
a  new  financial  scheme  threatens  our  prestige,  even  in  the  pro- 
duction of  new  inventions. 

"German  factory  construction,  factory  management  and  pro- 
tection of  workingmen  is  far  in  advance  of  ours. 

' '  European  land  is  not  nearly  so  good  as  ours,  but  the  average 
crop  per  acre  on  it  is  three  times  as  large. 

"Our  people  are  wasteful  and  unscientific  all  along  the  line. 

"We  neglect  our  opportunities  with  startling  carelessness. 

"An  enormous  roadside  crop  of  apples  is  grown  in  Germany  on 
land  which  would  be  wasted  in  this  country. 

"The  immense  advantage  of  intensive  farming,  not  realized 
in  the  United  States. 

"Our  farmers  diffuse  their  time  and  energy  on  crude  cultiva- 
tion of  large  areas. 

"Good  European  building  laws,  absolutely  enforced,  are  far 
superior  to  ours. 

"Fire  horrors  like  those  peculiar  to  America  are  impossible 
in  Germany. 

"German  building  depreciation  is  only  a  small  percentage  of 
ours. 

"Germany  is  not  behind  us  in  general  manufacturing  and  far 
in  advance  in  chemical  industries. 

"The  Continental  European  farmer  is  infinitely  more  effective 
than  tlie  American  farmer,  because  he  is  more  careful  and  less 
wasteful. 

"A  great  movement  to  increase  rural  efficiency  is  in  progress 
in  Austria,  and  America  needs  something  of  the  same  sort. 

"The  German  peasant  understands  many  of  the  great  requi- 


BUSINESS  IS  BUSINESS  247 

sites   of   success   far  better  than   the    American    farmer   does. 

"From  a  soil  so  bad  tliat  we  would  scorn  it,  the  foreign  ngri- 
culturist  produces  marvelous  crops. 

"Berlin  is  full  of  energy;  Berliners  even  in  their  walking  gait 
show  signs  of  their  great  progress. 

"Berlin  night  life  is  as  brisk  as  their  day  life;  it  is  brisker, 
even,  than  New  York's. 

"Night  life  is  much  maligned;  it  means  progress  and  effic- 
iency; and  stupidity  and  night  life  do  not  go  together. 

"Too  much  sleep  may  be  a  national  curse. 

"One  added  hour  of  night  life  will  do  wonders  with  a  nation. 

"Berlin  is  truh^  wonderful  and  has  a  street  liner  than  any  in 
this  country. 

"They  are  doing  more  in  Germany  to  make  the  people  happy 
than  we  are  in  America. 

"The  homes  of  Berlin  workingmen  make  one  ashamed  of  tlie 
United  States;  the  dreadful  tenements  which  disgi'ace  and  de- 
face American  cities,  threatening  health  and  happiness,  are  sup- 
planted there  by  magnificent  apartment  houses. 

"Law  means  law  in  Germany;  in  the  United  States  it  does 
not;  and  this  is  particularly  true  of  building  laws  to  prevent 
loss  of  life  by  fire. 

"^Management  of  public  officers  is  better  in  Germany  than  in 
the  United  States,  fewer  laws  and  these  more  competent  than 
ours. 

"Germany  has  taken  her  city  governments  out  of  politics. 

"Graft  as  we  know  it  here  does  not  exist  in  Germany. 

"In  the  chemical  industries,  Germany  far  surpasses  us. 

"Germany  controls  trusts  admirably,  but  she  encourages,  not 
discourages  them. 

"And  Germany  is  very  prosperous  while  we  are  gnimbling 
at  hard  times. 

"Emperor  William  not  a  war  lord  really,  but  a  potentate  of 
commerce. 

"He'll  never  go  to  war  if  he  can  help  it;  his  army  and  na\'y 
are  business  investments. 

"William  is  a  marvel  among  monarchs,  a  sporadic  case  of 
great  ability  in  an  ocean  of  incompetence. 

"We  are  careless,  even  in  our  wheat  selection;  Germany  is 
not. 

"No  similar  journey  in  the  United  States  could  have  been 
made  for  the  same  money." 


CHAPTER  XVI 
STIMULATING  PROGRESS 

Foreign  criticism  as  an  unintended  stimulus  of  progress — Germany's  well 
planned  policy — Expansion  of  the  German  merchant  marine — German- 
izing the  world — Self  criticism  one  of  the  secrets  of  German  success — 
Absorbing  the  wealth  of  the  world's  knowledge — What  England  pays 
for  self  satisfaction — Blunders  of  English  statesmen  in  relation  with 
Germany — Origin  of  the  phrase,  "Made  in  Germany" — A  blundering 
naval  demonstration — Futility  of  the  new  English  patent  law — Recent 
German  industrial  colonies  in  England — The  stimulus  of  criticism  and 
the  dangers  of  flattery — Vast  influence  of  the  press — How  directed  to 
useful  purposes — Remarkable  control  of  the  press  in  Germany — How 
all  things  work  together  for  the  benefit  of  German  policy. 

In  the  world  rivalry  of  the  great  powers,  the  tremendous  ad- 
vances made  in  the  last  generation,  particularly  in  Germany, 
are  disconcerting  to  other  powers,  and  to  some  a  source  of  the 
greatest  distrust  and  irritation. 

Yet  no  little  of  the  stimulus  which  Germany  has  received 
has  been  unconsciously  applied  by  envious  rivals  in  the  form  of 
criticisms  intended  to  harass  and  destroy  her  commerce. 

Internally  the  conscious  criticism,  that  with  which  Germany 
regards  her  own  efforts,  has  been  the  infonning  motive  of  her 
well  planned  policy. 

Of  the  workings  of  the  German  system,  Mr.  Charles  Edward 
Russell  under  "Germanizing  the  World,"  in  the  Cosmopolitan 
of  January,  1906,  writes: 

"In  well  considered,  definitely  planned,  undeviating,  relent- 
less but  peaceful  aggression,  the  rest  of  the  world  seems  asleep 
in  comparison  with  the  German  government.  No  man  can  men- 
tion an  instance  in  the  last  thirty-five  years  in  which  they  have 
been  worsted. 

"They  are  persistent,  tireless,  indefatigable,  always  at  it, 
pushing  German  goods  here,  German  ships  there  and  German  in- 
fluence everywhere.  In  politics  and  diplomacy,  or  in  trade  and 
commerce,  they  work  with  the  same  inspiration  to  the  same  end. 
We  have  seen  them  here  at  our  doors  steadily  elbowing  the  Brit- 
ish  from  the  North   Atlantic  carrying  trade,  steam   and  sail. 

248 


STBIULATING  PROGRESS  249 

Look  over  the  lists  any  day  and  see  the  number  of  German 
steamers  that  enter  the  port  of  New  York  now  and  think  ba<-k 
to  the  days  when  the  German  flag  was  a  rare  sight  in  our  har- 
bors.    Is  it  not  amazing? 

"And  what  they  have  done  in  a  small  way  here,  they  have 
done  in  a  great  way  around  the  globe.  Look  at  the  map  of  one 
of  their  steamship  lines.  They  send  ships  to  every  maritime 
countr}'.  They  go  into  Southampton  and  take  the  eream  of  the 
Eastern  trade  from  under  the  very  faces  of  the  British.  They 
go  into  India  and  Australia  and  crowd  the  British  out  of  their 
o^\'n  markets.  England  itself  they  flood  with  goods,  they  force 
themselves  into  the  English  colonies;  they  have  steamship  lines 
to  Montreal  and  ^Melbourne,  they  dnve  into  Calcutta  and  Bom- 
bay; they  have  huge  settlements  in  South  America,  tliey  get  the 
fat  concessions  in  Turkey  and  Argentina.  And  at  the  head  of 
all  this  is  the  German  government  urging,  encouraging,  advis- 
ing, pushing.  Not  many  years  ago  we  used  to  draw  a  greater 
part  of  our  immigration  from  Germany.  Very  few  Germans  im- 
migrate now.  They  have  too  much  to  do  at  home.  You  can 
hardly  find  a  considerable  German  town  that  cannot  show  a 
new  factory  or  an  old  one  enlarged.  The  prosperity  of  the 
country  seems  boundless  and  has  a  novel  kind  of  patriotic  in- 
spiration ;  for  it  is  not  alone  to  make  money  but  to  spread  Ger- 
manism that  the  merchants  strive  and  dare.  Every  enterpri.se 
that  carries  German  influence  abroad  can  count  upon  the  gov- 
ernment's intelligent  support. 

"Trade  may  follow  the  flag  or  the  flag  may  follow  trade,  I 
do  not  know  which ;  but  one  thing  is  sure  enough :  German  in- 
fluence follows  German  commerce.  The  clever  German  govern- 
ment sees  to  that.  First  comes  a  German  steamship  carrying 
German  goods,  then  a  German  branch  sets  up;  then  other  Ger- 
man houses  come  in,  then  there  is  a  German  consul  in  that  part 
and  in  ten  years  the  place  is  saturated  with  Teutonism.  It  has 
been  so  all  about  South  America,  the  East,  the  South  Seas  and 
elsewhere.     It  will  be  more  and  more  so  from  this  time  on." 

Such  is  the  German  policy.  It  is  the  policy  which  has  made 
Germany  what  it  is  to-day,  envied  by  many  short  sighted  na- 
tions. The  tremendous  advantages  which  Germany  possesses 
over  other  nations  is  in  almost  all  cases  the  reason  why  Ger- 
many is  attacked  by  other  nations.  Even  for  the  only  fairly 
well  informed  observer,  it  is  rather  amazing  to  see  part  of  the 
daily  press  expressing  their  views,  or  rather  making  statements 


250  THE  PEICE  OF  INEFFICIENCY 

regarding  Germany  and  everything  pertaining  to  Germany, 
which  in  nine  cases  out  of  ten  are  self-contradictory.  Their 
efforts  no  doubt  succeed  in  forming  a  certain  phase  of  public 
opinion,  especially  as  regards  those  unfamiliar  with  what  is  go- 
ing on  abroad,  or  those  who  flatly  refuse  to  make  themselves  ac- 
quainted with  conditions. 

Some  papers  imagine  that  they  have  an  ax  to  grind,  and  they 
proceed  to  do  it  at  the  expense  of  their  readers,  and  to  some 
degree  of  the  nations  at  large.  AVould  it  not  be  a  great  benefit 
to  the  public  instead,  to  be  kept  informed  of  progress  in  other 
countries,  and  have  the  fact  kept  in  mind  that  there  are  things 
which  can  be  learned  from  other  nations? 

Germany  openly  and  frankly  acknowledges  that  she  learns 
many  lessons  from  America.  Exchange  professors  are  one  strik- 
ing example.  The  Germans  are  proud  of  their  methods.  They 
send  their  young  men  the  world  over  to  study  foreign  methods, 
languages  and  customs.  They  then  adopt  such  as  are  practical 
and  combine  them  with  their  own  thorough  practice  and  theories. 
Is  it  any  wonder  that  to-day  they  lead  the  world? 

Germany,  forty  years  ago,  a  poor  second  rate  country,  stands 
now  as  an  example  for  the  world ;  Japan,  ten  years  ago  likewise 
poor  and  less  than  a  second  rate  country,  has  achieved  the  most 
remarkable  historical  progress  of  our  generation.  These  star- 
tling advances  have  been  principally  due  to  the  ability  to  recog- 
nize their  own  inferiority  compared  with  other  nations,  and  then 
achieve  the  superior  position.  The  costly  price  of  inefficiency 
which  England  paid  and  is  paying  and  will  pay  for  a  long  time 
to  come,  is  due  to  the  self-satisfaction  she  exhibits,  the  belief 
that  she  cannot  learn  from  other  nations,  and  this  is  the  princi- 
pal reason  she  is  standing  still  if  not  retrograding. 

In  her  relations  to  Germany,  the  statesmen  of  England  are 
continually  making  blunders.  Among  numerous  examples,  a 
notable  one  is  the  phrase  ' '  Made  in  Germany ' '  which  has  become 
famous  the  world  over.  This  phrase  had  its  origin  in  an  Eng- 
lish regulation,  compelling  articles  of  German  manufacture  sold 
in  England  to  be  so  labeled.  What  was  intended  as  a  means 
of  discrimination,  soon  became  a  trade  mark  of  great  value,  just 
as  the  queues  of  the  Chinese,  a  IManehu  ordinance,  became  a 
Chinese  badge  of  honor,  defeating  the  intentions  of  the  discrim- 
inators. 

Ordinarily,  the  German  is  inclined  to  be  easy  going,  to  let 
well  enough  alone,  but  he  does  not  like  to  be  rubbed  too  much 


STBIULATING  PROGRESS  251 

the  wrong  way.  England  some  years  ago  made  a  great  and 
overawing  naval  demonstration  in  the  North  Sea,  with  the  idea 
of  frightening  the  Germans.  The  result  was  that  the  German 
government  seized  the  opportunity  to  invite  the  puhlic  to  the 
North  Sea  coast,  providing  excursion  rates,  and  the  impression 
intended  by  England  was  duly  registered,  with  the  contrary  re- 
sult, however,  that  vast  naval  expenditures  were  authorized 
shortly  thereafter,  the  English  thus  playing  directly  into  the 
hands  of  the  German  administrators.  King  Edward  thus  proved 
to  be  the  greatest  promoter  the  German  navy  ever  had. 

A  recent  example  of  the  futile  efforts  of  the  English  ministers 
to  curb  German  development  is  found  in  the  new  English  patent 
law,  which  compels  patented  articles  to  be  manufactured  in 
England.  It  was  argued  that  this  would  keep  millions  of 
pounds  in  England,  and  it  was  aimed  at  the  German  manufac- 
turer, and  also  against  the  United  States. 

The  result  has  been  disappointing,  many  patents  lapsing, 
other  companies  withdrawing,  while  in  the  case  of  the  more  im- 
portant inventions,  especially  the  German  chemical  patents,  the 
result  has  been  the  employment,  not  of  additional  English  labor, 
especially  of  the  lower  class,  but  the  importation  of  trained 
Gennan  labor,  since  the  English  were  not  skilled  and  could  not 
readily  be  trained.  Thus  numerous  German  colonies  have  been 
established  in  England  and  the  patent  laws  have  proven  abor- 
tive, while  at  the  same  time  putting  in  England  a  large  number 
of  men  who  have  served  in  the  German  array,  adding  further 
to  the  great  English  bugaboo  of  a  German  invasion,  one  of  the 
most  curious  examples  of  national  hj'steria  that  has  ever  been 
exhibited,  and  which  has  a  fresh  outbreak  every  time  an  imagi- 
nary Zeppelin  is  sighted. 

The  idea  of  a  German  invasion  of  England  would  probably 
never  have  occurred  to  a  single  German,  not  even  the  "terrible" 
German  waiters  or  the  sellers  of  frankfurters  in  the  London 
streets,  so  feared  as  Gennan  spies,  had  it  not  been  suggested  in 
England,  and  the  constant  reiteration  of  the  subject  is  the  only 
thing  that  might,  at  some  future  time,  tempt  GeiTuany  to  make 
the  absurd  attempt. 

The  growth  of  German  colonies  in  England  as  a  result  of  the 
patent  law,  has  gone  forward  so  quietly  that  the  English  min- 
istry is  not  yet  awake  to  it.  What  sort  of  an  explosion  will  oc- 
cur when  this  "peril"  is  fully  recognized  may  readily  be 
imagined. 


252  THE  PRICE  OP  INEFFICIENCY 

English  newspapers,  realizing  the  blunders  that  have  been 
made,  and  impotent  in  the  face  of  German  progress,  have 
adopted  a  policy  of  continual  attacks.  Like  the  anti-German 
press  every^^^here,  their  efforts  only  redound  to  the  injury  of 
those  making  them.  The  "knocker"  generally  hurts  no  one  as 
much  as  his  own  country.     ' '  Every  knock  is  a  boost. ' ' 

Flattery  would  be  a  far  more  dangerous  weapon,  for  if  it  is 
wished  to  destroy  the  ambition  of  a  nation  or  of  an  individual, 
flattery  will  nine  times  out  of  ten  succeed,  inducing  the  fatal 
self-satisfaction  of  the  belief  that  the  ambition  is  already  real- 
ized, potentially  if  not  actually.  The  benefit  of  national  criti- 
cism is  too  little  understood.  To  criticise  another  country  is  to 
put  it  on  its  guard,  call  forth  a  defense,  or  if  none  be  possible, 
the  way  is  pointed  out  for  an  improvement  which  would  not 
otherwise  have  been  seen. 

The  tremendous  influence  which  is  in  the  hands  of  the  press 
for  the  betterment  or  otherwise  of  a  country  is  too  little  under- 
stood by  the  general  public.  The  assumed  superiority  of  Amer- 
ican inventors,  with  other  causes,  has  resulted  in  placing  Amer- 
ica in  a  second  rate  position  in  invention,  and  her  inventors  are 
in  a  most  deplorable  position. 

The  press  of  England  and  Germany  are  particularly  flexible 
instruments  for  the  expression  of  inspired  opinions,  thus  exert- 
ing enormous  influence. 

Charles  Edward  Russell  in  the  Cosmopolitan  of  January, 
1906,  on  "Germanizing  the  World,"  says: 

"Intelligent  observers  have  often  marveled  at  the  way  the 
English  press  is  controlled  to  further  the  ends  of  England 's  in- 
ternational interests  no  matter  which  party  may  be  in  power. 
For  example,  the  government  having  concluded  that  it  is  for  the 
best  interests  of  England  to  frighten  Germany  by  affecting  a 
partiality  for  France,  the  entire  press,  Liberal,  Conservative, 
Radical  and  Socialistic,  breaks  out  into  elaborate  eulogies  of 
France  and  the  French,  those  that  on  such  an  occasion  as  the 
Dreyfus  trial,  for  instance,  had  exhibited  the  most  violent  hatred 
for  anything  French,  being  now  the  most  elequent  and  fervent 
in  chanting  praises.  But  the  German  government  can  beat  such 
an  achievement  and  not  half  try. 

"The  British  press,  it  must  be  admitted,  is  not  skillful  about 
these  things.  Too  often  the  praise  sounds  forced,  the  welcome 
has  a  false  ring.  The  Gennan  government  can  influence  the 
German  press  to  say  things  in  a  way  that  carries  conviction. 


STIMULATING  PROGRESS  253 

"Moreover,  the  British  government  can,  as  a  rule,  influence 
only  the  ne\vsi)apers  in  Great  Britain;  the  Gennan  plan  is  to 
influence  the  papers  of  the  world  so  far  as  German  affairs  and 
interests  are  concerned.  This  seems  at  first  thought  merely  a 
grotesque  fancy,  in  reality  it  is  not  fantastic  nor  even  difficult. 
The  center  of  German  news  is  Berlin.  The  news  that  is  sent  out 
from  Berlin  flows  through  certain  well-detined  and  recognized 
channels.  Five  or  six  news  bureaus  supply  the  bulk  of  the  cor- 
respondence for  all  the  newspapers  of  the  world. 

"The  news  despatch,  wisely  conducted,  is  therefore  the  strong- 
est weapon  of  the  modern  government,  and  in  its  use  of  this 
weapon,  the  German  government  has  shown  all  others  to  be 
children.  The  English  have  the  mere  rudiments  of  the  art.;  the 
Fi-ench  and  we  know  naught  of  the  matter.  It  is  not  merely  in 
international  politics  that  the  German  government  finds  in  its 
press  its  greatest  instrument;  in  the  limitless  field  of  German 
influence  and  German  commerce  the  press  plays  a  mighty  part 
for  Germany. 

"In  Berlin  is  the  best,  the  most  complete,  and  the  best  man- 
aged press  reading  and  clipping  bureau  in  the  world,  run  by 
and  for  the  German  government.  There  is  not  anywhere  around 
the  world  a  conspicuous  publication  affecting  in  any  way  the 
interests  of  Germany,  that  does  not  find  its  way  to  this  bureau. 
The  gi'eat  newspapers  of  all  languages  are  watched  incessantly 
and  every  correspondent  in  Berlin  is  rated  according  to  his  dispo- 
sition towards  the  German  plan.  A  simple  but  tremendous  force 
is  brought  to  bear  to  discourage  hostility  and  what  the  govern- 
ment regards  as  misrepresentation. 

"The  value  to  his  newspaper  of  any  correspondent  lies  in  his 
facile  access  to  the  sources  of  news.  A  hostile  or  critical  corre- 
spondent finds  the  avenues  of  information  gently  but  firmly 
closed  against  him.  So  quietly  is  this  done  that  the  unfortunate 
man  is  slow  to  believe  that  he  is  really  boycotted,  and  so  ef- 
fectively that  he  can  get  nothing  that  he  wants.  He  is,  in  fact, 
marooned,  he  might  as  well  be  on  a  desert  island.  But  for  the 
astute  correspondents  that  never  offend  and  never  tell  what  they 
should  keep  quiet,  life  in  Berlin  is  made  easy  and  the  path 
straight. 

"Sometimes  a  newspaper,  say  in  London,  prints  an  objection- 
able letter  or  telegram  from  Berlin  and  obtains  it  from  other 
sources  than  its  regular  correspondent.  In  such  a  case  appar- 
ently disinterested  inquiries  are  made.     The  correspondent  clears 


254  THE  PRICE  OF  INEFFICIENCY 

himself,  and  all  is  \rell,  for  the  system  is  conducted  with  perfect 
fairness.  Once  or  twice  a  careless  or  youthful  correspondent  has 
undertaken  to  deny  the  authorship  of  his  own  work  and  woe  has 
been  his  portion  for  his  indiscretion.  In  Germany,  the  govern- 
ment operates  the  telegraph ;  it  can  easily  discover  who  sent  any 
particular  message  in  which  it  may  take  an  interest. 

"The  system  is  ingenious,  elaborate,  ably  conducted  and  most 
useful.  It  amounts  to  a  censorship  without  the  name  or  ap- 
pearance of  that  odious  institution,  and  in  another  way  it  is  far 
better  than  any  censorship  could  be,  because  it  is  inspirational 
and  creative,  and  it  is  positive,  not  merely  negative,  it  avoids 
the  unpleasant  and  spreads  the  agreeable. 

"For  instance,  the  German  government  prefers  that  little  be 
printed  about  the  German  navy  and  that  that  little  shall  not  be 
commendatory'.  Persistently  it  has  fostered  the  notion  that  the 
German  navy  is  a  poor  thing  lagging  at  the  heels  of  other  navies. 
As  a  matter  of  fact,  man  for  man  and  ship  for  ship,  it  is  one  of 
the  verj^  best  navies  afloat,  but  the  world  in  general  does  not 
suspect  the  fact  and  the  German  government  is  satisfied  with 
the  world's  ignorance.  The  German  newspapers  say  so  little 
about  the  navy  of  Germany,  about  the  new  ships  and  the  prepa- 
rations and  the  maneuvers,  that  when  there  is  some  demonstra- 
tion, like  that  at  Kiel  last  summer,  the  unprepared  spectator 
learns  with  a  shock  that  here  is  a  sea  power  surely  to  be  reckoned 
with." 

Other  countries  pluming  themselves  over  the  construction  of 
14"  naval  guns  are  disturbed  to  find  Germany  in  the  possession 
of  15-inch  guns,  on  several  ships,  though  the  fact  had  not  been 
allowed  to  become  public  in  Germany. 

Germany  in  the  dissemination  of  news  has  recently  gone  to 
the  extent  of  reducing  cable  rates,  so  that  cables  go  direct  from 
Germany  to  the  United  States  instead  of  going  via  London. 
This  has  the  effect  of  preventing  any  possible  discoloration  of 
the  news  while  passing  through  English  hands,  which  has,  it  is 
claimed,  so  frequently  occurred. 

Such  a  discoloration  is  peculiarly  an  English  expedient,  the 
depreciation  of  a  rival  seeming  to  satisfy  the  public  of  its  own 
inferiority.  British  stupidity  is  summarized  in  an  interesting 
manner  by  iMariano  Herggelet,  a  German  writer  resident  in 
England  for  fifteen  years,  in  a  recent  volume  in  which  he  sums 
up  the  Englishman's  doctrine  as  follows: 

1.  Don't  think,  reflect,  or  bother  your  head  about  anything. 


STIMULATING  PROGRESS  255 

2.  Don't  make  any  unnecessary  exertion. 

3.  Don't  get  excited  about  your  mistakes,  neglect,  or  failure 
to  do  things.     They  don't  matter. 

4.  Don't  learn  any  foreign  languages;  there  are  always  plenty 
of  foreigners  about  to  do  what  may  be  needed  in  this  line. 

5.  Don't  change  anything  until  it  is  too  late. 

6.  Don't  learn  anything  from  other  nations. 

7.  Don't  take  any  preventive  measures — just  calmly  let 
calamity  approach. 

8.  Don't  have  any  exaggerated  sense  of  duty;  there  are  other 
people  for  that. 

9.  Be  sure  to  forget  everything  promptly;  a  long  memory 
simply  disturbs  the  peace  of  the  soul. 

10.  Keep  no  promises,  except  when  they  concern  pleasure  or 
sport. 

11.  Never  be  thorough — do  only  what  is  absolutely  necessary. 

12.  Don't  begin  anything  too  soon.  "Maiiana!"  To-morrow 
is  another  day. 

13.  Remember  that  unconcern  and  indifference  will  carry 
you  gently  and  pleasantly  through  life. 

14.  Remember  that  superficiality  and  comfort  save  trouble 
and  beautify  existence. 

15.  Dream,  idle  happily,  lull  yourself  with  delicious  thoughts 
of  riches  and  sport,  sleep  long,  eat  much,  work  lightly  and  little, 
spend  a  quarter  of  an  hour  daily  inveighing  against  your  exas- 
perating political  opponents,  pay  your  taxes,  be  satisfied,  believe 
implicitly  in  the  natural  superiority  of  the  British  Nation,  and 
act  pleasantly  toward  everybody,  so  far  as  externals  are  con- 
cerned. 

There  can  be  no  doubt  of  the  accuracy''  of  this  estimate  of  Eng- 
lish characteristics,  as  it  is  attested  by  numerous  other  obsei*\'ers. 
Traits  such  as  these  are  in  fact  more  or  less  evident  in  all  Anglo- 
Saxon  races  of  modern  times.  It  might  not  be  unprofitable  for 
them  to  seek  example  for  improvement  from  the  German  descend- 
ants of  the  original  parent  stock  which  boasts  a  history  of  fifteen 
centuries  before  the  branching  off  of  the  Anglo-Saxon  branch. 
Many  of  the  traits  which  have  proved  so  disastrous  to  the 
English  people  are  jeopardizing  American  institutions  and  are 
the  basis  of  our  present  inability  to  cope  with  conditions  which 
have  arisen.  They  are  the  primary  cause  of  the  unequal  dis- 
tribution of  wealth  which  is  the  most  serious  condition  in  this 
country  to-day,  wiiere  3%  of  the  people  own  20%  of  the  wealth, 


256  THE  PRICE  OF  INEFFICIENCY 

and  9%  of  the  people  own  51%  of  the  wealth,  and  88%  but 
29%  of  the  wealth,  while  in  Germany  only  2%  of  the  wealth  is 
held  by  the  rich,  54%  being  held  by  the  middle  classes  and  44% 
by  the  lower  classes. 

Wealth  in  Germany  is  more  uniformly  distributed  than  in  any 
other  country,  due  largely  to  the  efficient  administrative  system, 
while  prosperity  is  very  rapidly  increasing.  The  average  sav- 
ings deposited  in  savings  banks  per  capita  of  the  whole  popula- 
tion, in  1910  w^as  in  round  numbers  as  follows:  Germany  $64, 
United  States  $46,  France  $28  and  Great  Britain  $24,  while  the 
number  of  depositors  was  21,  9,  14  and  13  millions  respectively. 
From  this  it  will  be  seen  that  nine  million  depositors  in  the 
United  States  saved  a  little  more  than  did  twenty-one  millions 
in  Germany,  and  that  only  one  person  in  nine  saves  in  the 
United  States  to  one  in  three  in  Germany.  This  shows  still 
further  an  unequal  distribution  of  wealth  in  the  United  States. 

A  few  laws  or  hurried  emergency  measures  will  not  be  suffi- 
cient to  cause  any  considerable  redistribution  of  wealth  in  this 
country.  The  condition  is  one  which  goes  vitally  into  the  habits 
and  characteristics  of  the  people  and  a  fundamental  realign- 
ment will  be  necessary  to  effect  the  cure. 


CHAPTER  XVII 
UNDEVELOPED  RESOURCES 

The  magical  triumphs  of  modern  chemistry  and  cncinoerinp — Coinin"  the 
air — Romance  of  air  nitrate — How  it  supplements  dwindling  resources 
— Soil  fertility  and  its  meaning  to  mankind — Norwegian  air  nitrate 
factories — Cyanamid  as  produced  in  Canada — Great  natural  wealth  of 
the  United  States  in  water  powers — Waste  of  200,000,000  horse  power 
annually — Costly  ignorance  of  American  engineers  on  hydroelectric  sub- 
jects— The  decline  of  American  waterways — Ruthless  methods  of  rail- 
ways— Bright  future  of  waterways,  due  to  recent  legislation — How 
cheap  water  transportation  has  enabled  the  United  States  to  command 
the  world's  iron  markets — Negk-ct  of  waterways  and  England's  de- 
cay— Fatal  self-satisfaction  of  English  iron  masters — Marvelous  de- 
velopments of  German  waterways — Why  the  tonnage  of  the  Rhine  is 
100  times  that  of  the  Mississippi — Berlin  the  center  of  a  web  of 
canals — The  extravagance  of  the  "pork  barrel"  in  Congress — Decline 
of  the  port  of  St.  Louis — Receipts  of  modern  canals — Electric  towing 
— Lack  of  progress  in  manufacturing  electrical  implements — Co-opera- 
tion of  farmer  and  engineer — How  it  will  double  the  farmer's  earnings 
— Details  of  electric  farm  machinery — Lower  cost  of  electricity  on  the 
farm — Multiplicity  of  uses  of  the  electric  motor — Electric  plowing 
superseding  the  most  ancient  of  labors — Profits  of  farm  by  products — 
Harvesting  by  electric  light. 

Op  the  great  triumphs  of  modern  chemistry  and  engineering, 
the  reduction  of  the  nitrogen  of  the  air  to  a  commercial  product 
is  one  of  the  most  notable  that  has  ever  been  achieved.  It  is 
far  reaching  in  effect  and  appeals  to  the  imagination  as  few 
discoveries  have  ever  done. 

To  get  a  tangible  and  salable  substance,  and  one  of  the  high- 
est value  to  mankind,  out  of  the  impalpable  air  is  a  result  that 
few  would  have  dared  predict  a  generation  ago. 

The  great  value  of  the  discovery  of  the  production  of  air 
nitrate  is  realized  but  little  by  the  general  public ;  but  it  may  be 
understood  when  the  fact  is  known  that  the  natural  supply  of 
nitrate,  which  is  known  most  commonly  in  the  form  of  saltpeter, 
is  near  the  point  of  exhaustion.  Nitric  acid  is  one  of  the  funda- 
mentals in  the  arts  and  nitrate  is  the  principal  fertilizer  of  the 
world,  while  saltpeter  is  an  indispensable  element  of  explosives. 

Besides  these,  there  are  a  great  number  of  important  uses  of 

257 


258  THE  PRICE  OF  INEFFICIENCY 

nitrate,  such  as  in  the  form  of  ammonia,  etc.,  and  a  synthetic 
source  of  supply  is  therefore  of  enormous  importance. 

If  before  the  discovery  of  air  nitrate,  the  world's  supply  had 
been  exhausted  or  cornered  by  some  aggressive  nation,  the  rest 
of  the  world,  without  explosives,  would  have  been  at  its  mercy, 
and  an  incalculable  impoverishment  of  the  earth's  soil  through 
the  cutting  off  of  the  supply  of  nitrates  would  have  resulted. 

One  of  the  greatest  problems  of  the  present  time  is  to  increase 
the  fertility  of  the  soil.  The  growing  crops  are  constantly  ex- 
tracting from  the  soil  three  chemical  substances, — nitrogen, 
potassium  and  phosphoric  acid, — and  it  is  necessary  that  they 
should  be  replaced  in  a  form  available  for  plant  life. 

The  nitrate  which  has  previously  been  used  to  improve  the 
soil  has  come  entirely  from  manures  worked  into  the  soil,  supple- 
mented of  late  years,  owing  to  the  insufficient  supply  and  cost 
of  manures,  by  deposits  of  nitrate  of  soda  taken  from  South 
America,  and  sulphate  of  ammonia  recovered  as  a  by-product 
when  coal  gas  is  made. 

The  output  of  Chili  saltpeter,  or  nitrate  of  soda,  is  at  the 
rate  of  1,500,000  tons  per  annum,  and  it  has  doubled  in  the  last 
fifteen  years,  while  500,000  tons  of  sulphate  of  ammonia  are  pro- 
duced annually.  Owing  to  its  high  cost  and  scarcity,  the  de- 
mand is  very  much  less  than  would  be  the  case  for  a  cheaper 
fertilizer. 

The  production  of  nitrates  from  the  air,  which,  unlike  water, 
is  a  mechanical  mixture  of  various  gases  and  not  a  chemical 
unity,  will  assist  in  keeping  the  composition  of  the  air  in  a  bal- 
anced condition,  as  most  of  the  huge  chemical  processes  of  nature 
involve  oxygen.  The  production  of  air  nitrate  assures  inex- 
haustible supplies  of  a  highly  necessary  substance  since  the  air 
contains  about  80%  of  nitrogen;  and  in  addition  it  affords  a 
means  of  utilizing  water  power,  which  under  ordinary  con- 
ditions, being  of  great  volume  at  some  seasons  of  the  year 
and  very  much  less  at  other  periods,  can  only  be  partially 
utilized. 

The  energy  thus  running  to  waste  amounts  to  an  enormous 
total,  and  the  production  of  air  nitrate  affords  a  means  of  trans- 
forming the  waste  energy  of  rainfall  into  soil  fertility. 

The  Department  of  Commerce  and  Labor  in  its  report  on  the 
manufacture  of  air  nitrate  fertilizers  says: 

"The  original  inventor  of  the  electro-chemical  process  for 
manufacturing  nitrate  fertilizers   and  other  chemical  produc- 


UNDEVELOPED  RESOURCES        259 

tions  from  the  air  was  Prof.  Birkcland,  a  NonN'egian  by  birth. 
After  Prof.  Birkeiand  had  made  his  discover^',  some  nine  or 
ten  years  ago,  he  associated  himself  with  Mr.  S.  Eyde,  an  ex- 
perienced civil  engineer. 

"By  experimenting  on  a  small  scale,  it  was  ascertained  that 
their  electro-chemical  process  for  the  production  of  nitrate  fer- 
tilizers from  the  atmosphere  was  likely  to  prove  a  success. 
Their  process  and  subsequently  their  improvements  and  new  in- 
ventions have  been  patented  in  the  majority  of  European  coun- 
tries as  well  as  in  the  United  States.  They  organized  a  stock 
company  entitled  Aktieselskabet  de  Norske  Kvalstofkompani, 
with  a  capital  of  $134,000  with  which  their  first  plant  was 
built  at  Notodden,  in  Telemarken,  some  70  miles  from  Chris- 
tiania. 

"Regarding  the  method  by  which  the  Birkeland-Eyde  lime 
saltpeter  or  calcium  nitrate  is  produced,  it  should  in  the  first 
place  be  noted  that  it  is  a  new  way  of  utilizing  electricity,  al- 
though it  is  a  succession  of  the  experiments  which  the  English 
physiologist,  Cavendish,  made  in  the  eighteenth  century,  by 
which  he  produced  combinations  between  the  nitrogen  and  the 
oxygen  of  the  atmosphere  by  letting  electrical  discharges  pass 
through  the  air  during  the  presence  of  a  decomposition  of  alkali, 
and  whereby  he  succeeded  in  producing  small  qualities  of  nitric 
acid.  The  Birkeland-Eyde  method  is  in  principle  the  carrying 
out  on  a  larger  scale  of  the  same  process  as  Cavendish  started 
on  a  smaller  one,  with  this  difference,  however,  that  Birkeiand 
and  Eyde  have  introduced  new  auxiliaries,  which  in  themselves 
constitute  highly  original  discoveries." 

The  process,  briefly  stated,  is  to  pass  air  through  an  enormous 
electrical  flame,  of  about  75  inches  in  width,  which  heats  the 
air  to  3,000  degrees  Celsius,  and  the  gases  are  then  cooled  and 
passed  over  lime  in  water,  resulting  in  calcium  nitrate  which  is 
sold  in  granular  form  like  salt. 

The  company  later  consolidated  with  the  Badische  Anilin  und 
Sodafabrick,  a  German  concern,  which  had  added  improvements, 
and  there  are  now  several  branch  companies,  with  a  total  capi- 
tal of  over  $16,000,000  all  paid  up,  while  the  annual  production 
will  soon  reach  80,000  tons. 

Two  German  chemists,  Adolph  Frank  and  Nikoderaus  Caro, 
of  the  technical  staff  of  the  Simens-Halske  Co.,  a  great  electri- 
cal firm,  have  discovered  an  entirely  dift'erent  process  of  extract- 
ing nitrate  from  the  air.     They  combine  coke  and  lime  at  3,000 


260  THE  PRICE  OF  INEFFICIENCY 

degrees  Centigrade,  resulting  in  a  substance  that  has  a  great 
affinity  for  nitrogen,  and  draws  it  directly  from  the  air.  This 
is  known  as  the  cyanamid  process  and  is  a  strong  competitor  of 
the  Birkeland-Eyde  process.  Cyanamid  is  equally  if  not  more 
valuable  as  a  fertiliser  and  is  easier  to  handle  in  its  commercial 
form,  being  less  liable  to  liquefy  and  cake. 

Twelve  companies  will  manufacture  it  in  Europe,  six  of  which 
are  already  in  operation,  while  a  plant  has  been  erected  on  the 
Canadian  side  of  Niagara  Falls.  The  foreign  plants  have  a 
capacity  of  167,000  tons  annually.  Plants  are  in  course  of  erec- 
tion in  Japan,  Mexico  and  other  countries. 

Cyanamid  sells  at  $55  to  $60  a  ton  at  present.  Tests  by  37 
various  governmental  stations  in  Europe  show  its  superior  value 
as  compared  with  Chili  saltpeter  as  a  fertilizer. 

The  United  States  has  $70,000,000  invested  in  fertilizer  fac- 
tories of  various  kinds.  Chilian  saltpeter  to  the  value  of  $75,- 
000,000  annually  at  two  and  one  half  times  its  former  price  is 
exported  by  Chili,  $15,000,000  of  which  comes  to  the  United 
States,  and  yet  while,  with  almost  criminal  carelessness,  we  dis- 
regard our  own  resources  and  allow  phosphate  rock  to  be  exported 
in  large  quantities,  our  imports  of  fertilizers  of  various  kinds  are 
$17,000,000  in  excess  of  our  exports  annually.  The  whole  of  this 
amount  could  be  saved  by  the  erection  of  hydro-electric  plants 
to  utilize  our  vast  wasted  water  power  and  to  manufacture  air 
nitrates. 

The  opportunity  of  the  United  States  in  this  respect  is  unusual, 
since  we  have  an  enormous  amount  of  water  power  going  to 
waste,  a  condition  not  found  in  Europe,  where  a  large  part  of 
the  available  power  has  already  been  utilized,  while  the  total  is 
vastly  smaller  than  in  the  United  States. 

Norway  has  five  and  one  half  times  the  available  water  power 
of  Germany  and  has  3,409  horse  power  available  per  1,000  inhab- 
itants, while  Great  Britain  and  Germany  have  only  23.1  and  24.5 
per  1,000  inhabitants  and  but  3.06  and  2.6  horse  power  per  square 
kilometer  respectively  (1  sq.  kilometer  equals  0.386  sq.  miles). 
Switzerland,  Sweden  and  Italy  are  next  in  order,  Switzerland 
having  36.6  horse  power  per  sq.  kilometer,  the  largest  of  any,  but 
practically  all  utilized.  The  following  table,  taken  from  the 
author's  article,  "Hydro-electric  Engineering  Practice"  in  the 
Engineering  Magazine,  shows  the  available  horse  power  of  the 
several  countries: 


UNDEVELOPED  RESOURCES        261 

Great    Britain    903,000  H.P. 

Germany     1,425,900  H.P. 

Switzerland     1,500,000  u.p. 

Italy    5,500,000  h.p. 

France     5,857,000  h.p. 

Austria    Hungary    6,460,000  H.p. 

Sweden     6,750,000  H.P. 

Norway     7,500,000  h.p. 

Total     3'5,965,900  h.p. 

The  United  States  has  a  total  of  30,000,000  horse  power  in 
water  power  running  to  waste.  If  properly  utilized  by  means 
of  storage,  economically  constructed  and  properly  designed  plants 
following  the  latest  European  practice,  this  would  amount  to 
from  150,000,000  to  200,000,000  horse  power.  A  steam  horse 
power  per  year  costs  $20  so  that  a  waste  of  power  of  $4,000,000,- 
000  is  occurring  annually. 

Air  nitrate  cannot  be  economically  produced  by  means  of 
steam  power  as  a  lower  cost  per  annual  horse  power  is  required 
than  can  be  obtained  with  coal. 

The  utilization  of  water  power  in  the  United  States  has  been 
greatly  retarded  by  two  main  causes.  The  first  is  the  fact  that 
hydro-electric  engineering  is  comparatively  little  understood  in 
the  United  States,  and  a  great  number  of  plants  have  been 
erected  by  incompetent  and  inexperienced  engineers  so  that  they 
cannot  even  compete  with  steam  power  plants. 

Not  only  are  the  plants  usually  badly  designed,  but  the  ma- 
chinery is  inferior.  So  little  understood  is  this  branch  of  work 
that  the  first  book  in  the  English  language  on  the  subject  of  the 
design  of  water  wheels  and  turbines  has  only  recently  been  an- 
nounced for  publication,  and  it  is  a  translation  of  a  German  book 
not  of  the  first  class.  The  most  successful  manufacturers  of  tur- 
bines and  water  wheels  in  the  United  States  employ  German 
engineers  and  first  copy  foreign  machinery,  and  then  have  the 
audacity  to  claim  that  the  originals  are  imitations  of  their  manu- 
factures. A  policy  of  bluff  of  this  kind  has  some  effect  in  a  com- 
mercial way,  but  the  forces  of  nature  cannot  be  bluffed  into  ac- 
complishing efficient  results  with  inefficient  machinery. 

Progress  in  engineering  depends  on  the  interchange  of  ideas 
between  the  engineers  of  various  countries  the  world  over,  and 
the  American  engineer  in  this  respect  has  not  kept  up  to  date. 
The  latest  European  practice  is  knoA^-n  to  but  few,  and  the  prac- 
ticability of  building  water  power  plants  on  an  economical  scale, 


262  THE  PRICE  OF  INEFFICIENCY 

which  will  be  able  to  compete  with  steam  and  also  to  furnish 
power  cheaply  enough  to  justify  the  manufacture  of  air  nitrate 
commercially  here  as  it  is  abroad  on  such  a  large  scale,  is  not 
therefore  known  to  the  capitalist,  who  does  not  accordingly  in- 
vest. The  progress  of  the  whole  country  is  thus  held  back  by 
the  ignorance  and  incompetency  of  its  engineers,  vast  agricul- 
tural benefits  lost  and  stagnation  inflicted  where  there  might  be 
prosperity,  all  on  account  of  engineering  inefficiency. 

Our  American  engineers  either  build  too  strong  or  too  weak. 
They  dislike  the  complicated  calculations  necessary  to  ascertain 
the  proper  size  of  members  and  constructions.  It  is  not  a  ques- 
tion of  ability  to  make  the  calculations,  but  they  are  simply  not 
thorough  and  do  not  do  it.  The  result  is  that  there  is  a  vast 
waste  in  all  kinds  of  engineering  projects.  The  cost  of  bridges, 
skyscrapers  and  other  works  is  greatly  more  than  it  should  be 
through  use  of  too  much  steel  and  other  materials,  and  machinery 
of  all  kinds,  though  compact  in  appearance,  is  inefficient  in 
operation. 

This  tendency  when  applied  to  water  power  plants  eliminates 
them  entirely,  and  thus  a  vast  industry  is  still  born  through  engi- 
neering incompetency.  Bankers  will  not  advance  money  for  new 
projects  and  the  incompetent  engineer  himself  not  only  keeps 
capital  idle,  but  being  idle  himself,  discourages  by  his  example 
brighter  men  from  seeking  to  enter  the  profession. 

Engineering  incompetence  exhibits  itself  in  lack  of  experience 
largely  and  in  the  building  of  constructions  in  a  haphazard  man- 
ner. Either  too  great  a  margin  of  safety  is  allowed  on  the  one 
hand  or  else  too  much  risk  is  taken  on  the  other,  as  may  be  seen 
in  the  failure  of  the  Austin  dam  and  the  Quebec  bridge. 

The  second  cause  which  retards  the  development  of  water 
power  in  the  United  States  is  the  uncertain  attitude  of  the  gov- 
ernment. 

The  government  scented  a  water  power  site  trust,  which  if  it 
does  exist  should  have  been  nipped  in  the  bud  in  the  first  place, 
and  has  accordingly  withdrawn  many  of  the  concessions  and  has 
the  whole  situation  bottled  up.  The  fear  that  capital  will  make 
too  much  is  in  this  case,  as  in  many  others  in  the  United  States, 
the  cause  of  much  of  the  stagnation  existing. 

The  inability  of  the  government  and  private  capital  to  reach 
a  working  arrangement  retards  the  water  power  developments, 
and  in  the  meantime  horse  power  to  the  value  of  $10,000,000  a 
day  goes  to  waste. 


UNDEVELOPED  RESOURCES         263 

The  United  States,  on  the  other  hand,  is  standing:  at  a  new  era 
in  the  development  of  its  water  transportation.  The  use  of  the 
great  waterways,  the  Mississippi,  the  ^Missouri,  the  Ohio  and 
their  tributaries  and  water  transportation  on  the  great  lakes  and 
through  the  many  important  canals  is  about  to  be  restored. 

If  public  opinion  secures  the  enforcement  of  the  recent  amend- 
ment to  the  Court  of  Commerce  Act  introduced  by  Senator  Bur- 
ton of  Ohio,  the  millions  that  have  been  spent  in  waterways  and 
their  improvement  will  begin  to  bear  fruit. 

The  practical  extinction  of  water  transportation  in  the  United 
States,  as  in  England,  has  been  due  to  the  fact  that  railroads 
were  allowed  unbridled  and  destructive  competition.  Railroads, 
at  a  loss  to  themselves,  have  cut  rates  to  a  point  where  the  water 
transportation  companies,  unless  powerfully  organized,  have  been 
driven  out  of  business.  Then  wdth  competition  gone,  the  rail- 
roads raised  freight  back  to  the  original  point  or  higher.  The 
waterways,  fearing  a  repetition  of  the  same  treatment,  have  not 
ventured  to  reenter  the  field  again. 

This  process  reduced  river  traffic  at  St.  Louis  from  2,130,525 
tons  in  1880  to  374,093  in  1909.  A  corresponding  section  of  the 
Rhine  carries  40,000,000  tons  annually.  The  IMississippi  is  thus 
a  graveyard  of  waters,  her  commerce  assassinated  by  the  rail- 
roads. 

This  condition,  however,  should  be  changed  by  Senator  Bur- 
ton's amendment,  which  in  effect  provides  that  if  a  railroad 
reduces  rates  in  competition  with  a  waterway,  it  cannot  again 
increase  them  after  the  waterway  succumbs.  This  will  give  the 
waterways  an  opportunity  to  compete  on  equal  terms.  A  similar 
law  fundamentally  applied  to  all  business  would  save  a  vast  pro- 
portion of  the  business  failures  of  the  United  States  and  go  a 
long  way  towards  solving  the  trust  problem. 

The  heretofore  ruthless  domination  of  the  railroads  has  re- 
sulted in  a  dog  in  the  manger  situation,  the  railroads  having 
but  60%  of  the  capacity  necessary  to  handle  the  traffic  of  the 
countiy,  even  at  their  extortionate  rates.  Car  famines  and  con- 
gestion of  traffic  with  no  prospect  of  relief  in  either  facilities  or 
rates  is  the  situation  that  will  be  relieved  by  the  operation  of  the 
new  law  if  it  proves  successful. 

How  important  cheap  water  transportation  is  may  be  seen 
from  the  condition  of  the  iron  business.  In  Germany  water 
transportation  under  governmental  encouragement  and  in  the 
United  States  under  conditions  of  ownership  in  which  the  self- 


264  THE  PEICE  OF  INEFFICIENCY 

interest  of  the  railroads  did  not  throttle  it,  has  been  the  factor  of 
most  importance  in  the  realignment  of  the  iron  producing 
nations. 

The  Department  of  Commerce  and  Labor  in  its  Bulletin  of 
January,  1909,  states  in  part: 

' '  The  German  iron  and  steel  industry  is  the  growth  of  the  last 
quarter  of  a  century.  Within  that  period  Germany  has  distanced 
Great  Britain  and  has  become  second  only  to  the  United 
States  in  raw  iron  production.  In  1885,  the  production 
of  Great  Britain  was  7,534,000  metric  tons,  the  United  States, 
4,109,000  and  Germany  3,687,000.  By  the  end  of  1907  the  rela- 
tive positions  of  the  three  countries  which  together  produced 
81%  of  the  world's  raw  iron  was:  United  States,  26,194,000; 
Germany,  13,046,000  and  Great  Britain,  10,083,000  metric  tons. 

"In  the  conversion  of  raw  iron,  that  is  in  making  steel,  the 
change  has  been  even  more  momentous.  In  1900,  when  Germany 
passed  Great  Britain,  the  figures  of  steel  production  were :  United 
States,  10,382,000;  Germany,  6,646,000,  and  Great  Britain, 
5,131,000  metric  tons.  In  1907,  the  steel  production  of  the  three 
countries,  comprising  approximately  80%  of  the  world's  total, 
stood :  United  States,  23,733,000 ;  Germany,  12,064,000  and  Great 
Britain,  6,627,000  metric  tons." 

These  figures  are  an  explanation  of  the  larger  part  of  the  dis- 
affection existing  in  England.  The  loss  of  dominance  in  such  a 
vast  industry  in  less  than  a  generation  is  a  staggering  blow  to 
British  self-satisfaction.  Its  possibility,  while  foreseen  by  Ger- 
man and  American  engineers,  was  brushed  aside  as  an  impossi- 
bility by  British  experts. 

The  preliminary  report  of  the  Inland  Waterways  Commission, 
1908,  states : 

"More  than  twenty  years  ago,  a  British  student  of  commercial 
conditions  visited  the  United  States  to  investigate  the  outlook  of 
the  iron  and  steel  industry  in  this  country.  On  his  return  home, 
he  gave  assurances  to  British  iron  manufacturers  that  they  need 
have  no  serious  fears  of  the  competition  of  the  United  States,  be- 
cause in  America  the  great  iron  ore  deposits  were  too  far  distant 
from  coal.  He  was  positive  it  would  never  be  possible  to  bring 
the  ore  to  the  coal  or  the  coal  to  the  ore  at  such  rates  as  would 
enable  production  of  iron  and  steel  cheap  enough  to  compete 
with  England. 

"How  completely  erroneous  was  this  conclusion  need  not  be 
suggested  now,  because  everybody  is  familiar  with  the  marvelous 


UNDEVELOPED  RESOURCES        265 

facilities  for  bringing  the  Lake  Superior  ores  to  the  Pittsburg 
iron  district,  and  witli  the  success  of  the  American  iron  and  steel 
industry  in  competing  with  all  the  world,  despite  the  initial  dis- 
advantages they  had  to  overcome.  Witnesses  before  the  British 
Royal  Commission  repeatedly  declared  that  the  process  of  bring- 
ing the  Lake  Superior  ores  to  the  docks  on  the  upper  lake,  first 
by  rail,  then  by  Lakes  Superior,  Huron  and  Erie  to  ports  conven- 
ient to  the  coal  districts  and  finally  by  rail  to  the  seats  of  the  iron 
industry  is  the  greatest  achievement  in  transportation  the  world 
has  ever  seen. 

"So  much  for  the  British  ironmakers'  error  in  underrating  the 
possibilities  of  internal  transportation  in  the  United  States.  As 
to  Germany,  their  error  was  hardly  less  striking.  In  the  begin- 
nings of  the  development  of  the  great  German  iron  trade,  Eng- 
lish iron  interests  declined  to  take  German  competition  seriously, 
because  the  government  ore  deposits  were  considered  utterly  in- 
adequate for  the  development  of  a  really  great  industry,  and  it 
was  presumed  that  the  transportation  of  great  quantities  of  ore 
to  the  seats  of  the  German  industries  would  be  so  expensive  as 
to  make  it  utterly  unprofitable.  Yet,  in  fact,  the  Germans  have 
developed  an  iron  industry  which  is  now  a  matter  of  concern  to 
every  competing  country,  and  which  is  based,  like  that  of  the 
United  States,  on  a  system  of  extremely  cheap  water  transporta- 
tion. While  there  is  a  large  and  increasing  production  of  iron 
ore  in  Luxemburg,  which  is  utilized  in  the  German  iron  industry, 
and  while  Germany  itself  produces  a  large  and  gi'owing  annual 
tonnage  of  ore,  and  brings  still  other  amounts  from  Austria- 
Hungary,  it  is  nevertheless  true  that  the  major  part  of  the  iron 
ore  reduced  in  Germany  comes  from  the  Scandinavian  peninsula 
and  from  Spain.  To  the  canals  and  canalized  rivers  of  the  em- 
pire is  due  the  credit  for  maldng  it  possible  to  thus  bring  foreign 
ores  to  the  German  industrial  regions.  Exceedingly  low  rates 
are  made  and  the  tonnage  handled  by  rivers  and  canals  is  tre- 
mendous. 

"Thus  it  appears  that  both  in  Germany  and  the  United  States 
the  development  of  the  utmost  possibilities  of  cheap  inland 
water  communication  is  entitled  to  recognition  for  having  made 
possible  the  upbuilding  of  the  industries  which  a  generation  ago 
seemed  economically  impossible.  With  their  great  supplies  of 
coal  and  ore  located  very  close  together,  and  with  ocean  trans- 
portation at  their  door,  British  manufacturers  seemed  sure  of  a 
domination  in  the  world's  iron  trade  that  could  only  be  ended 


266  THE  PRICE  OF  INEFFICIENCY 

by  exhaustion  of  their  supplies  of  coal  or  iron.  A  very  different 
situation  has  been  brought  about  largely  by  the  utilization  of  in- 
ternal water  transportation  in  the  United  States  and  Germany. 
This  one  object  lesson  has  deeply  impressed  the  British  com- 
munity, and  in  no  small  measure  has  been  responsible  for  the 
present  agitation  of  the  waterways  question. 

' '  Great  Britain  is  the  one  exception  among  the  industrial  coun- 
tries of  Europe  to  the  rule  of  encouraging  both  rail  and  water 
transportation.  British  railroad  policy  has  aimed  at  the  suppres- 
sion of  waterway  competition,  and  has  pretty  thoroughly  suc- 
ceeded. To-day  the  British  business  community  finds  itself 
paying  higher  transportation  tolls  than  continental  countries,  and 
because  of  this  fact  is  at  a  great  and  increasing  disadvantage  in 
competitive  markets. 

' '  So  serious  has  this  situation  come  to  be  considered  by  British 
traders  that  Parliament  has  taken  cognizance  of  the  demand  for 
rehabilitation  of  waterways,  and  a  careful  inquiry  into  the  entire 
subject  of  water  and  rail  transportation  is  now  being  carried  on 
by  the  board  of  trade. 

"It  seems  interesting  and  significant  that  Great  Britain  and 
the  United  States  are  the  only  industrial  countries  of  the  first 
class  in  which  water  transportation  has  so  long  been  neglected, 
and  it  is  a  suggestive  fact  that  in  both  these  countries  a  powerful 
opinion  has  lately  developed  in  favor  of  following  the  lead  of 
continental  nations,  emancipating  the  waterways  from  railroad 
domination  and  vigorously  developing  them  as  an  independent 
factor  in  transportation." 

No  country  has  developed  its  waterways  to  the  extent  that 
Germany  has  and  the  results  achieved  are  astonishing. 

Hubert  Bruce  Fuller  in  an  article,  "European  Waterways," 
in  the  Review  of  Reviews,  for  May,  1911,  describes  the  German 
system : 

"The  great  aim  of  Prince  Bismarck  was  a  compact  and  per- 
manent German  Empire.  He  believed  that  nothing  would  so 
much  contribute  to  this  end  as  the  improvement  of  transportation 
facilities  and  their  control  by  the  central  government.  After  the 
Franco-German  war,  Bismarck  set  himself  to  the  task  of  modern- 
izing and  extending  the  German  waterways  system.  The  essen- 
tial dogma  of  the  German  commercial  creed  is  that  the  water- 
ways must  be  maintained  by  the  state  if  they  cannot  maintain 
themselves. 

' '  The  German  canal  system  is  based  upon  the  practical  utiliza- 


UNDEVELOPED  RESOURCES        267 

tion  of  the  great  rivers,  their  improvement  and  connection  by  a 
scientific  and  practical  system  of  canals. 

' '  The  Rhine,  the  most  important  and  the  largest  German  river, 
flows  through  Holland  at  its  mouth,  but  it  is  developed  and  main- 
tained as  a  great  artery  of  German  commerce.  East  of  the  Rhine 
in  order  are  the  Weser,  the  Elbe,  the  Oder  and  the  Vistula,  all 
of  which  have  been  improved  by  the  German  government  and 
now  carrj^  an  enormous  and  constantly  increasing  tonnage. 

' '  Owing  to  the  supreme  importance  of  the  Rhine,  the  Gennan 
government  early  saw  the  desirability,  both  from  a  commercial 
and  military  point  of  view,  of  securing  a  connection  within  Ger- 
man territory  by  which  boats  could  reach  the  Rhine  from  a  North 
Sea  German  port.  The  solution  was  the  Dortmund-Ems  canal, 
connecting  with  the  Rhine  near  the  Dutch  border  and  extending 
northwestwardly  to  the  North  Sea  at  Emden. 

' '  The  German  Rhine  is  commercially  the  most  important  stream 
in  the  world.  It  furnishes  a  most  illuminating  contrast  to  the 
decadent  Mississippi.  The  United  States  has  expended  more 
money  in  the  twenty  years  ending  in  1907  on  the  most  important 
stretch  of  the  ]\Iississippi,  206  miles  between  St.  Louis  and  Cairo, 
than  the  German  central  government  has  expended  in  the  im- 
provement of  the  Rhine  from  Strasburg  to  the  frontier  of  Hol- 
land, a  distance  of  355  miles.  Yet  the  amount  of  tonnage 
handled  on  this  portion  of  the  Mississippi  was  374,093  tons  in 
the  year  of  1908,  w^hile  that  on  the  Rhine  in  the  same  year  was 
between  40,000,000  and  45,000,000  tons,  an  amount  from  eighty 
to  one  hundred  times  as  much. 

''The  Elbe  carries  20,000,000  tons  of  freight  a  year.  The 
Oder  River  at  its  upper  end  at  Breslau  and  Kosel  even  in  these 
shallow  reaches,  carries  3,500,000  tons  of  freight  a  year.  This 
river,  though  small,  carries  more  traffic  each  year  than  the  entire 
Mississippi.  The  reason  is  that  the  German  people  use  sane 
methods,  modern  barges  and  towboats  and  efficient  terminal 
handling  apparatus. 

"The  city  of  Berlin  is  to-day  the  center  and  market  place  of  a 
labyrinth  of  canals  and  canalized  water  courses.  The  Spree  and 
Havel,  with  their  network  of  canals  reaching  from  the  Elbe  and 
Oder,  have  made  possible  the  prosperity  of  modern  Berlin, 
These  rivers  and  tributary  and  connecting  canals  are  at  all  times 
crowded  with  boats  bringing  the  coal  and  briquettes  of  Silesia, 
timber,  stone,  bricks,  lime,  fruit  and  other  heaw  freight  from 
the  interior,  and  give  Berlin  direct  water  communication  with 


268  THE  PRICE  OF  INEFFICIENCY 

Hamburg  and  Stettin.  Modern  Berlin  with  its  2,000,000  inhab- 
itants and  its  vast  industries,  would  never  have  been  possible 
except  for  the  combination  of  natural  and  artificial  watercourses 
which  have  given  easy  and  cheap  transportation  for  fuel,  build- 
ing and  other  raw  materials.  The  Maerkischen,  Wasserstrassen, 
or  marsh  canals,  which  lead  from  the  Oder  and  the  Elbe  to  Ber- 
lin, are  none  of  them  more  than  six  feet  deep.  Yet  they  carry 
13,000,000  tons  of  frieght  each  year." 

The  inefficiency  of  the  congressional  system  of  government  is 
nowhere  so  glaringly  evident  as  in  our  treatment  of  the  canal 
and  water  systems.  The  "pork  barrel"  is  here  most  openly  in 
evidence.  The  improvement  of  waterways  for  the  purpose  of 
circulating  money  in  the  locality  of  the  favored  congressman 
has  resulted  in  a  vast  system  of  improvements,  pursued  without 
reference  to  any  organized  plan,  and  to  practically  no  useful  end. 

Millions  have  been  thrown  into  the  work  of  improving  water- 
ways while  the  railroads  were  all  the  while  killing  water  trans- 
portation, so  that  the  more  highly  improved  the  waterways  be- 
came, the  less  traffic  they  carried. 

The  lack  of  reason  showTi  in  our  river  improvements  is  obvious 
at  many  points.  For  example,  the  Green  River  has  a  channel 
of  6  to  8  feet  v/hile  the  Ohio  into  which  it  flows  has  at  certain 
seasons  but  four  feet.  The  lesser  is  thus  made  deeper  than  the 
greater. 

Mr.  Hubert  Bruce  Fuller  in  ''The  Crime  of  the  Pork  Barrel," 
in  the  World's  Work,  of  August,  1910,  says: 

"A  good  illustration  is  the  condition  of  traffic  on  the  Tennes- 
see River  near  Chattanooga,  where  the  Muscle  Shoals  canal  has 
been  built  at  a  cost  of  $3,191,726.  More  than  $1,100,000  has  been 
expended  for  repairs  and  maintenance  since  completion.  In  the 
year  1908,  $53,443  was  expended  for  this  purpose.  The  amount 
of  freight  of  all  classes  carried  through  this  canal  in  1908  was 
12,539  tons.  It  fluctuates  from  year  to  year,  but  that  is  a  fair 
average.  Thus,  simply  based  upon  the  amount  expended  for 
maintenance  and  repairs  for  the  year  1908 — the  last  for  which 
figures  are  available — the  cost  to  the  people  of  the  United  States 
was  $4.26  for  eveiy  ton  of  freight  carried.  And  if  we  compute 
interest  at  3%  on  the  original  cost  of  improvements,  a  further 
sum  of  $7.65  per  ton  must  be  added,  making  a  total  of  $11.91 
for  every  ton  of  freight  passing  through  this  canal. 

"It  cost  $38,218.50  to  maintain  a  lock  and  dam  in  the  Wabash 
River  at  Grand  Rapids,  Illinois  and  Indiana,  in  1908.     The  total 


UNDEVELOPED  RESOURCES        269 

traffic  through  this  lock  for  the  same  year  was  5,121  tons  of  which 
more  than  4,440  tons  were  lumber  and  timber.  Lumber  and  tim- 
ber do  not  require  canalization  for  their  transportation,  since 
they  can  best  be  carried  by  rafts  floated  or  poled  down  stream. 
A  balance  then  of  680  tons,  remains  of  corn,  shells  and  miscel- 
laneous freight.  The  mere  cost  of  maintaining  this  lock,  there- 
fore, was  approximately  $7.46  per  ton  for  all  classes,  including 
lumber  in  its  various  forms,  and  $56  for  every  ton  of  freight 
carried  through  it  excluding  lumber. 

"The  Mississippi  River,  famed  in  history  and  tradition,  is  a 
notable  object-lesson  for  the  student  of  American  waterways. 
On  the  entire  river  between  St.  Paul  and  New  Orleans,  the  gov- 
ernment has  expended  more  than  $90,000,000.  In  1880  fourteen 
times  as  much  river  freight  was  received  and  shipped  at  St.  Louis 
as  in  1909,  when  it  amounted  to  but  374,093  tons. 

RIVER  BUSINESS,  PORT  OF  ST.  LOUIS 

Total  boats  Total  tons  of  Total  tons  Grand 

Yeab  arrived  freight  rec'd  freight  shipped         total  tons 

1880     4,692  1,092,175  1,038,350  2,130,525 

1881  3,951        1,208,430         884,025       2,092,455 

1890  3,201  663,730  617,985  1,281,715 

1891  2,900  592,140  512,930  1,105,070 

1900  2,217  612,010  245,580  757,590 

1909  374,093 

' '  The  United  States  has  spent  more  on  this  stretch  of  205  miles 
of  the  Mississippi  than  the  central  government  of  Germany  has 
expended  for  the  improvement  of  the  Rhine  from  Strasburg  to 
the  frontier  of  Holland,  a  distance  of  355  miles.  Yet  on  this 
section  of  the  Rhine  the  total  tonnage  in  1908  was  approximately 
40,000,000  tons  as  against  less  than  375,000  tons  on  the  JNIissis- 
sippi  as  has  been  pointed  out.  The  United  States  has  spent  more 
on  the  Mississippi  River  than  any  other  government  has  spent 
on  any  other  stream  in  the  world.  And  we  could  take  the  40,- 
000,000  tons  of  traffic  of  the  Rhine  and  handle  it  with  better  ad- 
vantage on  the  Mississippi  with  room  for  untold  millions  more. 
The  simple  fact  remains  that  the  Mississippi  to-day  possesses  the 
channel,  but  it  is  not  used. ' ' 

As  an  illustration  of  what  may  be  expected  in  American  water- 
way transportation  under  the  new  law,  examples  may  be  taken 
of  German  traffic. 

The  Duisburg-Ruhrort  district  had  a  tonnage  of  2,935,000  in 


270  THE  PRICE  OF  INEFFICIENCY 

1875.  In  1905  this  had  increased  to  19,462,000.  Berlin  and 
Charlottenburg  increased  from  3,239,000  to  10,114,000  and  Ham- 
burg from  799,000  to  7,853,000  during  the  same  period. 

The  total  length  of  all  navigable  waters  in  Germany  is  10,000 
kilometers  (6,000  miles)  while  there  are  54,000  kilometers  (32,- 
400  miles)  of  railroads.  The  railroad  receipts  are  $500,000,000 
a  year,  and  the  expenses  $350,000,000,  leaving  a  net  profit  of 
$150,000,000  (for  year  1909).  The  railroads  haul  45,000,000,000 
ton-kilometers  per  year  while  the  waterways  haul  15,000,000,000 
ton-kilometers.  The  waterways,  less  than  one-fifth  the  length  of 
the  railways,  thus  handle  25%  of  the  total  traffic.  (Govern- 
mental report,  1905.) 

The  average  charges  on  the  railroads  are  one  and  one-tenth 
cents  per  ton-mile,  while  on  waterways  the  average  is  but  four- 
tenths  of  a  cent  per  ton-mile. 

The  above  railroad  receipts  include  passenger  as  well  as  freight 
receipts  as  the  German  government  controls  the  railroads.  The 
passenger  charges  per  mile  are  as  foUo^'s:  First  class,  2.8  cents, 
second  class  1.76  cents,  third  class  1.2  cents  and  fourth  class  .8 
cents. 

If  the  United  States  is  to  achieve  the  proper  results  the  water- 
ways must  be  conducted  on  modern  principles.  The  old  towpath, 
the  mule  and  the  barefoot  boy,  made  famous  in  Garfield's  case, 
must  no  longer  be  in  evidence.  Instead,  canals  must  take  ad- 
vantage of  electrical  development.  The  latest  practice  in  Europe 
is  to  drive  them  as  trolley  cars,  with  a  wire  overhead  and  the 
barge  motor  driven,  or  where  this  is  too  expensive,  or  produces 
too  much  wash,  a  small  trolley  engine  of  special  design  runs 
alongside,  either  on  tracks  or  on  a  roadway,  and  taking  power 
from  central  stations  along  the  lines,  draws  the  barges  at  a  speed 
which  makes  the  canal  a  real  rival  of  the  railroad. 

The  engineering  features  of  electric  haulage  for  canals  are 
highly  developed  in  Germany,  but  it  is  an  almost  unknown  in- 
dustry in  this  country. 

The  development  of  canals  in  such  a  manner  will  produce  an 
effect  in  manufacturing  similar  to  the  creation  of  suburbs  by 
trolleys.  If  the  German  policj''  is  followed,  that  of  decentraliza- 
tion of  industries,  manufacturing  plants  now  congested  in  large 
cities  will  be  widely  distributed.  The  rapid  development  of 
canals  in  Germany  produced  at  first  considerable  speculation  in 
land  alongside,  but  the  government  now  condemns  a  kilometer 
(.06  of  a  mile)  on  each  side  of  the  canal,  and  then  sells  the  land 


UNDEVELOPED  RESOURCES        271 

in  such  a  way  as  to  encourage  its  plan  of  the  decentralization  of 
industries. 

This  plan  should  also  be  adopted  in  the  United  States,  and  a 
beginning  has  been  attempted  in  New  York  state,  where  a  recent 
amendment  of  the  constitution  proposed  that  the  city,  in  opening 
new  streets  could  condemn  additional  strips  on  either  side  the 
re-sale  of  which  would  repay  in  most  cases  the  cost  of  the  im- 
provements.    This  amendment,  however,  was  defeated. 

To  obtain  the  best  results,  our  waterways  must  have  a  broad 
administrative  policy,  free  from  politics  and  be  constructed  by 
engineers  of  the  highest  skill.  Such  waterways  will  repay  richly 
all  that  may  be  invested  in  them.  The  increased  facilities  will 
benefit  no  one  as  much  as  the  farmer  whose  products  are  bulk)' 
and  being  in  staple  form  largely,  do  not  require  rapid  transpor- 
tation. The  example  of  the  use  of  electrical  power  on  canals 
will  be  of  great  value  to  agriculture  for  here  also  electricity  can 
be  used  to  the  greatest  advantage.  The  tendency  of  the  average 
producer  is  to  ignore  new  machinery.  This  is  particularly  true 
of  the  farmer,  the  slowest  of  all  to  adopt  new  machinen,%  except 
the  fire  departments,  which  show  the  most  stubborn  and  costly 
neglect  of  new  devices.  The  farmer,  though  his  manual  labor 
is  of  the  hardest,  adopts  new  machinery  with  the  greatest  reluc- 
tance, and  when  he  does  he  allows  his  machinery-  often  to  stand 
unprotected  in  the  open  field  through  the  M'inter  for  use  the 
next  season.  His  failure  to  take  advantage  of  his  mechanical 
opportunities  is  costly  alike  to  himself  and  to  the  whole  country. 

The  electric  plow,  long  successfully  in  use  abroad,  effecting  the 
greatest  savings,  has  not  yet  scratched  the  earth  in  the  United 
States  and  has  been  completely  ignored  by  our  manufacturers 
who  do  not  desire  to  take  up  new  devices  which  cannot  readily 
be  standardized.  The  general  use  of  electricity  on  farms  and  in 
rural  industries  is  also  entirely  neglected. 

But  the  use  of  electricity  on  our  farms  is  sure  to  be  greatly 
increased  with  the  progress  of  intensive  cultivation,  which  is  be- 
coming an  acute  national  need;  and  the  farmer  and  the  rural 
industries  in  general  should  take  advantage  of  the  engineering 
profession,  to  utilize  our  national  resources  through  the  medium 
of  electricity,  for  the  benefit  and  welfare  of  our  country  as  a 
whole.  The  present  decade  will  be  notable  for  our  fanners  for 
its  scientific  agricultural  developments  with  the  aid  of  electricity. 

No  sharp  line  of  demarkation  exists  between  farm  and  urban 
power  needs  and  electrical  power  should  benefit  the  farmer  as 


272  THE  PRICE  OP  INEFFICIENCY 

-well  as  the  city  man.  As  a  class,  the  farmer  is  a  large  user 
of  power,  but  the  sources  from  which  he  draws  it  are  at  present 
inefficient  and  uneconomical,  compared  with  industrial  standards 
in  other  lines.  Of  the  29,000,000  persons  engaged  in  gainful 
occupations,  reported  by  the  United  States  1900  census,  about 
10,000,000  devote  their  energies  to  the  farm.  About  89%  of  the 
horses  and  mules  in  this  country  are  also  at  work  on  the  farm. 
The  farmer  uses  more  implements  and  a  greater  variety  of  me- 
chanical devices  than  any  other  class,  and  it  is  important  that 
he  should  co-operate  with  the  engineer  in  order  to  take  advant- 
age of  our  national  resources,  to  replace  the  much  sought  for 
and  the  much  needed  manual  labor,  to  cut  down  considerably  the 
number  of  draft  animals,  to  make  the  farm  produce  more,  and  to 
make  rural  life  more  congenial  and  agreeable. 

Better  methods  of  agriculture  are  of  such  vast  importance  to 
everyone,  farmer  and  consumer  alike,  that  the  following  resume 
of  the  present  state  of  electricity  on  the  farm  taken  from  a  series 
of  articles  by  the  author,  under  the  title,  "Domestic  and  Rural 
Applications  of  Electricity, ' '  in  the  Electrical  Review  and  West- 
ern Electrician,  should  prove  in  the  nature  of  a  revelation  to  the 
layman. 

"There  is  no  mechanical  power  which  can  supplant  as  con- 
veniently and  cheaply,  manual  and  animal  labor  on  the  farm 
or  country  estate,  as  electricity.  Electricity  is  far  superior 
for  supplying  energy  to  steam  or  any  internal  combustion 
engine.  In  fact,  there  is  no  other  agent  which  can  supply 
alf  three  necessities,  light,  heat  and  power  from  the  same 
source.  Due  to  this  fact,  working  hours  on  the  farm  and 
other  rural  industries  can  be  regulated,  similar  to  city  or 
other  commercial  industries,  and  life  in  rural  communities 
can  be  made  equally  if  not  more  attractive,  than  that  found 
in  the  cities,  where  the  struggle  for  existence  is  incessant,  and  the 
living  accommodations,  or  what  corresponds  to  home  life,  falls  far 
short  of  the  pleasant  and  healthful  occupations  of  the  counti-y, 
and  the  agreeable  surroundings  found  in  the  rural  communities. 

"Our  giant  industries  are  of  recent  origin  and  started  in  a 
humble  w^ay,  and  now  sui-pass  and  are  far  superior  to  any  branch 
of  agrarian  pursuits.  This  condition  is  readily  accounted  for; 
the  services  of  the  trained  engineer  were  used  to  advantage  in 
building  up  our  great  manufacturing  plants,  while  the  farming, 
though  the  oldest  of  industries,  has  been  neglected  even  to  the 
point  of  becoming  an  abandoned  industry. ' ' 


UNDEVELOPED  RESOURCES        273 

Up  to  the  present  time,  especially  in  America,  the  aid  of 
the  technical  man  is  seldom  sought  in  solving  many  of  the  prob- 
lems which  arise  in  rural  industries.  Probably  there  is  no  bet- 
ter authoritative  statement  on  the  value  of  technically  trained 
men  as  an  aid  to  modern  farming,  than  that  made  by  Col.  Roose- 
velt on  Aug.  23,  1910,  at  Ithaca,  N.  Y. 

"One  reason  why  the  great  business  men  of  to-day — the  great 
industrial  leaders — have  gone  ahead  while  the  fanner  has  tended 
to  sag  behind  the  others,  is  that  they  are  far  more  willing,  indeed 
eager,  to  profit  by  expert  and  technical  knowledge,  that  can  only 
come  as  a  result  of  the  highest  education.  From  railways  to  fac- 
tories no  great  industrial  concern  can  nowadays  be  carried  on, 
save  by  the  aid  of  a  swarm  of  men  who  have  received  a  high 
technical  education  in  electricity,  in  chemistiy,  in  engineering, 
in  one  or  more  of  a  score  of  special  subjects.  The  big  business 
man,  the  big  railway  man,  does  not  ask  college  trained  experts 
to  tell  him  how  to  run  his  business,  but  he  does  ask  numbers  of 
them  to  give  him  expert  advice  and  aid  on  some  one  point  indis- 
pensable to  his  business.  He  finds  this  man  usually  in  some  grad- 
uate of  a  technical  school  or  college,  in  which  he  has  been  trained 
for  his  life  work. 

"In  just  the  same  way,  the  farmers  should  benefit  by  the  ad- 
vice of  the  technical  men  who  have  been  trained  in  phases  of  the 
very  work  the  farmer  does.  I  am  not  now  speaking  of  the  man 
who  has  had  an  ordinary  general  training,  whether  in  school  or 
college.  AVhile  there  should  undoubtedly  be  such  a  training  or 
foundation  (the  extent  differing  according  to  the  kind  of  work 
each  boy  intends  to  do  as  a  man),  it  is  nevertheless  true  that 
our  educational  system  should  more  and  more  be  turned  in  the 
direction  of  educating  men  toward,  and  not  away  from,  the  farm 
and  the  shop. 

"During  the  last  half  century,  we  have  begun  to  develop  a 
system  of  agricultural  education,  at  once  practical  and  scientific, 
and  we  must  go  on  developing  it.  But,  after  developing  it,  it 
must  be  used.  The  rich  man  who  spends  a  fortune  upon  a  fancy 
farm,  with  entire  indifference  to  cost,  does  not  do  much  good  to 
farming,  but  on  the  other  hand,  just  as  little  is  done  by  the  work- 
ing fanner  who  stolidly  refuses  to  profit  by  the  knowledge  of  the 
day,  who  treats  any  effort  at  improvement  as  absurd  on  its  face, 
and  refuses  to  countenance  what  he  regards  as  newfangled  ideas 
and  contrivances  and  jeers  at  all  book  farming." 

The  ex-president  voices  a  sentiment  that  the  farmer  should 


274  THE  PEICE  OF  INEFFICIENCY 

heed,  both  for  his  own  benefit  as  well  as  for  the  benefit  of  human- 
ity at  large,  who  on  account  of  his  lack  of  progress  must  pay 
more  for  their  food  and  thus  have  their  condition  in  life  rendered 
more  miserable. 

Continuing  from  the  author's  article: 

"There  are  thousands  of  steam  and  internal  combustion  en- 
gines in  use  on  our  farms  to-day  principally  for  replacing  draft 
animals  and  of  course  a  proportionate  number  of  farm  hands; 
they  are  used  with  machinery,  such  as  plows  and  threshers  and 
especially  pumps.  However,  for  operating  small  machinery, 
such  as  required  in  dairies  as  cow  milkers,  cream  separators,  but- 
ter kneaders,  etc.,  an  internal  combustion  engine  could  not  be  as 
advantageously  used  as  an  electric  motor,  for  the  reason  that  the 
smallest  commercial  internal  combustion  engine  is  about  two 
horse  power,  while  the  electric  motor  may  be  chosen  in  capacities 
of  one-tenth  horse  power  and  upwards  to  suit  the  machine  to  be 
operated,  and  again,  no  fuel  is  necessarily  carried  along,  the  only 
requirement  being  to  turn  a  switch  to  start  the  motor. 

"In  fact  the  practice  has  proven  that  all  farm  machinery  can 
advantageously  be  operated  by  electric  motors.  The  usually  oper- 
ated machines  on  the  farms  are,  plows,  rollers,  reapers,  thresh- 
ers, corn  grinders,  corn  shellers  and  shredders,  fodder  cutters, 
wood  saws,  horse  and  sheep  clippers,  unloading  and  hoisting  hay 
and  other  farm  products.  Another  great  labor  saving  in  the  use 
of  electricity  is  in  serving  washing  machinery;  carpet  cleaners, 
sewing  machines,  fans;  further,  heating  appliances  for  cooking 
purposes  and  heating  irons,  all  of  which  could  hardly  be  served 
with  any  agent  other  than  electricity.  Aside  from  this,  what  is 
mostly  needed  is  light,  and  the  electric  light  is  the  only  light.  As 
electric  energy  has  to  be  supplied  to  the  motors  either  from  an 
outside  source  or  from  its  own  central  plant,  it  is  but  natural 
that  electricity  be  applied  as  far  as  possible  for  light  and  heat 
as  well  as  for  power. 

"An  up-to-date  farmer  should  possess  his  own  electric  gener- 
ating station  which  may  be  operated  by  water,  steam,  gas,  gaso- 
line, oil  or  windmill  power. 

' '  In  many  instances  where  a  stream  runs  through  the  property 
or  the  neighborhood  of  same,  cheap  power  may  be  derived  from 
this  natural  source,  as  regards  the  first  cost  and  operating  ex- 
penses. 

"Generating  current  by  steam  power,  the  cost  per  killowatt 
hour  is  comparatively  high,  yet  by  proper  engineering  skill,  one 


UNDEVELOPED  RESOURCES        275 

horsepower  may  be  obtained  as  low  as  one  cent  per  hour.  Prac- 
tically the  same  results  may  be  obtained  with  a  gas  producer 
plant,  in  which  case,  instead  of  burning  tlie  coal  in  a  steam  boiler, 
using  the  steam  for  driving  the  engine,  the  coal  is  slowly  burned 
in  a  producer,  generating  gas  for  operating  the  gas  engine. 

"Gasoline,  oil  and  alcohol  engines  work  on  the  same  principle 
as  the  gas  engine,  all  of  which  are  of  the  internal  combustion 
type.  Great  strides  have  been  made  in  the  last  decade  in  this 
type  of  engine,  and  to-day  it  operates  with  reliability  and  econ- 
omy and  requires  but  little  attention. 

"Another  source  of  energj'  for  generation  of  electric  current 
for  farm  and  country  residences  is  the  windmill.  The  early 
Dutch  windmills  were  built  with  sweeps  from  50  to  100  feet  in 
diameter;  our  modern  American  windmills  have  sweeps  from  12 
to  18  feet,  and  generate  more  power  than  the  early  Dutch  mills, 
with  less  attention,  etc. 

"All  the  prime  movers  can  be  connected  to  electric  generators 
by  belt,  gearing  or  couplings,  and  the  control  of  same  by  modern 
engineering  skill  can  be  accomplished  automatically  so  that  little 
attention  is  required. 

"As  the  greatest  amount  of  energy  is  used  in  the  day  time, 
while  the  load  for  illumination  is  small  and  principally  comes  in 
the  evening,  it  would  therefore  be  an  impracticable  propos- 
ition to  run  the  prime  movers  at  that  time.  The  use  of  a  storage 
battery  is  consequently  of  the  greatest  service,  supplying  energy 
at  any  time  of  the  day  or  night.  In  connection  with  the  storage 
battery  and  with  the  new  development  of  the  low  voltage  Tung- 
sten lamps,  the  cost  and  size  as  well  as  the  maintenance  expense 
may  be  considerably  reduced  by  proper  engineering. 

"The  main  feature,  and  in  which  the  great  advantage  of  an 
electrically  operated  farm  lies,  is,  that  the  farmer  himself  has  at 
all  times  under  his  direct  control  the  entire  supply  of  electric 
energy  being  used,  which  may  be  obtained  from  some  public  ser- 
vice corporation  at  from  5  to  10  cents  per  kilowatt  hour,  or  better 
still,  the  energy  may  be  supplied  from  his  own  private  generating 
plant  at  cost  varying  from  1  cent  per  kilow^att  hour  and  upward. 

"A  policy  much  adopted  abroad  is  to  install  a  rural  central 
station  for  the  purpose  of  supplying  a  number  of  farms,  niral 
industries,  country  residence  and  estates  with  electric  current. 
By  establishing  a  rural  central  station,  either  steam,  water,  gaso- 
line, oil  or  gas,  a  great  saving  in  the  production  of  electric  energy 
may  be  secured.     To-day  we  find  in  Geraiany  as  many  as  100  to 


276  THE  PRICE  OF  INEFFICIENCY 

150  consumers  being  supplied  with  electric  energy  from  one  of 
the  numerous  rural  central  stations. 

"Many  of  the  German  farmers  have  connected  with  their 
farms,  rural  industries  whereby  they  utilize  their  by-products 
and  herein  lies  the  secret  of  success  of  many  well-to-do  farmers. 
For  instance,  in  the  last  mentioned  central  station  system,  there 
are  connected  four  grist  mills,  with  five  motors,  having  a  total 
capacity  of  105  horse  power ;  one  tile  works  with  a  40  horse  power 
motor;  one  saw  mill  with  a  20  horse  power  motor,  four  wheel- 
wrights have  motors  amounting  to  16  horse  power;  and  in  con- 
nection with  same,  using  motors  of  varying  capacities,  are  other 
industries,  such  as  cabinet  making,  distilling,  blaeksmithing,  bot- 
tling works,  etc.  There  are  also  connected  with  the  system  some 
20  consumers  for  light  only,  having  a  total  of  343  incandescent 
lamps  and  5  arc  lamps,  one  railway  and  freight  station  with  120 
incandescent  lamps;  one  club  house  with  72  lamps  and  6  arc 
lights,  and  further  two  towns  are  supplied,  having  a  total  of 
1,692  lamps. 

' '  From  the  above  facts  and  figures,  it  is  obvious  that  electricity 
can  give  a  new  stimulus  to  agriculture  and  farming,  and  at  the 
same  time  opening  up  a  new  way  by  which  the  rural  population 
can  be  induced  to  remain  on  the  farm  instead  of  flocking  to  the 
cities,  and  being  forced  to  take  an  entirely  new  branch  of  service 
in  order  to  earn  a  living. 

' '  A  very  decided  feature  is  that  a  few  motors  properly  selected 
can  operate  all  of  the  machines  on  the  farm,  instead  of  having  a 
steam  or  gasoline  prime  mover  attached  to  each  machine.  It  is 
just  in  this  feature  that  lies  a  great  advantage  of  electrically 
operated  farm  machinery.  Take,  for  instance,  a  motor  placed  on 
a  low  four  wheeled  truck,  and  brought  to  the  threshing  machine 
and  connected  by  means  of  a  belt ;  the  motor  is  connected  to  the 
electric  supply  mains  by  a  flexible  cable  plugged  into  a  suitable 
outlet.  By  throwing  a  switch,  the  motor  starts  and  operates  con- 
tinuously without  attention.  After  the  threshing  is  completed, 
the  motor  may  then  be  connected  to  the  baling  machine,  which 
packs  the  straw  into  bales,  and  if  necessary  the  motor  can  be  used 
for  loading  the  bales  onto  wagons  by  operating  a  hoist.  At  other 
times,  the  same  motor  drives  the  water  pump,  wood  saw,  etc. 

"It  is  readily  seen  that  the  electric  motor  can  operate  without 
the  attention  necessary  for  steam  or  gasoline  prime  movers,  which 
have  to  be  supplied  with  water,  coal  and  gasoline  as  the  case  may 
be.     With  all  other  prime  movers,  when  placed  in  the  barn  or 


UNDEVELOPED  RESOURCES        277 

hay  mow,  or  beside  the  stack  in  the  field,  the  fire  risks  are  a 
thousand  fokl  greater  than  with  an  electric  motor  in  the  same 
place,  in  fact  an  enclosed  electric  motor  can  be  placed  anywhere 
on  the  farm  without  fire  risk  or  fear  of  an  explosion. 

"The  motors  used  on  dairy  appliances  and  for  the  various 
household  operations  are  of  such  small  size  and  weight,  that  they 
are  easily  carried  around  by  one  or  two  persons,  and  applied  to 
one  machine  or  another  wherever  needed;  thus  many  farms  can 
get  along  with  one  large  and  one  small  motor.  As  the  various 
farm  machines  operate  at  different  speeds,  the  motors  are  sup- 
plied with  suitable  regulating  devices,  so  that  the  desired  speeds 
may  be  obtained. 

"The  great  advantage  of  cold  storage  is  not  properly  recog- 
nized to-day  by  farmers.  By  means  of  electrically  operated  cold 
storage  systems,  butter,  milk,  eggs  and  other  perishable  goods 
may  be  saved  from  spoiling.  In  many  cases,  especially  with 
fruit,  a  farmer  is  forced  to  let  his  fruit  lie  on  the  ground  and 
rot,  because  the  price  offered  does  not  pay  him  the  expense  of 
picking,  packing  and  shipping  his  goods  to  the  commission  mer- 
chant. A  cold  storage  system  would  enable  him  to  pick  his  fruit 
in  the  proper  season  when  the  market  price  is  low,  and  store  it 
until  he  receives  his  ovm  price. 

"Ice  machines  for  refrigerating  plants,  in  this  case,  are  pref- 
erably electrically  operated,  and  the  motor  applied  to  the  equip- 
ment will  start  and  stop  automatically,  and  will  keep  the  tem- 
perature in  the  cold  storage  room  within  a  few  degrees,  up  and 
down,  of  the  desired  temperature. 

"For  irrigation  purposes,  electric  pumps  are  of  great  service, 
whether  on  large  or  small  scale.  As  these  pumps  operate  only 
in  certain  seasons  of  the  year,  and  certain  hours  of  the  day,  pub- 
lic service  corporations  have  recognized  of  late  that  the  pumps 
for  irrigation  purposes  assist  in  giving  a  good  load  factor  on  the 
station  and  consequently  offer  energy  for  this  purpose  at  excep- 
tionally low  rates.  The  motor-driven  pumps  may  be  stationaiy 
or  portable. 

"Large  sums  are  yearly  spent  for  irrigation  purposes  and 
waterways  regulation  and  drainage  systems,  and  seemingly  in 
almost  all  cases,  without  due  consideration,  of  utilization  of  the 
energy  of  the  water  for  generating  electric  current  which  might 
be  advantageously  used  for  farming  or  rural  industries.  Good 
examples  on  a  large  scale  of  such  combination  systems  will  be 
found  in  Switzerland  and  particularly  in  Germany,  where  all 


278  THE  PRICE  OF  INEFFICIENCY 

kinds  of  advantages  are  taken  of  natural  resources,  and  proper 
husbanding  of  same  for  the  benefit  of  the  public  in  general. 

"Electric  plowing  has  been  carried  on  in  Germany  for  some 
15  years,  and  particularly^  in  the  last  few  years,  great  strides  have 
been  made.  Of  the  several  systems  employed,  the  one  and  two 
motor  systems  are  most  extensively  used.  Both  systems  are  car- 
ried out  in  the  same  way,  that  is,  a  cable  on  a  drum  pulls  the 
plow  across  the  field. 

"Electric  plowing  has  great  advantages  over  the  gasoline  or 
steam  engine  plow  system ;  for  instance  in  the  latter  case,  a  great 
amount  of  coal  and  water  must  be  brought  to  the  field  by  numer- 
ous teams  and  drivers  which  must  be  held  in  readiness.  Electric 
plowing  can  be  carried  on  in  practically  every  kind  of  weather, 
for  instance,  steam  operated  plows  may  freeze  in  cold  weather, 
whereas  the  electric  plow  is  not  affected  by  the  cold,  and  the 
latter  can  also  be  used  in  soft  or  loamy  soil  where  horses  cannot 
work  and  in  hilly  ground. 

"As  far  as  the  cost  of  electric  plowing  is  concerned,  experience 
shows  that  it  can  be  done  cheaper  per  acre  than  horse  or  steam 
plowing.  The  field  of  electric  plowing  of  to-day  is  found  prin- 
cipally in  Germany.  It  is  an  established  fact  that  American 
agricultural  machinerj^  in  its  wide  practical  application  is  in 
most  respects  far  superior  to  that  of  any  foreign  make,  and 
should  the  domestic  manufacturers  devote  themselves  with  the 
same  skill  to  electric  plowing,  it  would  be  a  question  of  only  a 
short  time  when  our  farmers  would  recognize  the  advantages  of 
the  system. 

"The  practical  application  of  electric  plowing  is  not  confined 
to  farms  of  large  acreage,  it  can  be  carried  on  to  good  advantage 
on  farms  of  small  size,  and  a  number  of  farmers  may  have  but 
one  plow  in  common,  to  do  the  work  of  the  different  farms,  or 
the  plow  may  be  rented  out. 

"The  idea  of  utilizing  farm  refuse  for  by-products  must  not 
be  discarded  without  close  study  and  consideration;  it  must  be 
borne  in  mind  that  our  modern  industries  make  use  of  all  possi- 
ble substances  for  by-products.  In  thousands  of  cases,  it  has 
turned  out  that  the  by-product  has  proved  more  valuable  than 
the  original  and  practice  has  always  shown  that  this  applies  pro- 
portionately to  rural  industries  and  the  farm  as  well  as  to  manu- 
factures. 

' '  ]\Iany  of  the  by-products  of  the  farm  which  now  are  allowed 
to  go  to  waste,  could  be  turned  to  good  account  by  the  use  of 


UNDEVELOPED  RESOURCES        279 

electrically  operated  apparatus,  especially  designed  to  turn  by- 
products into  marketable  goods. 

"Nearly  all  fruit  is  rich  in  sugar,  varymg  in  contents  from  10 
to  5% ;  of  the  common  fruits,  the  grape  yields  the  largest  per- 
centage of  sugar.  The  normal  -svine-grape  contains  from  16% 
to  30%  ydth  an  average  of  20%.  The  two  most  important  plants 
for  yielding  sugar  are  the  sugar  cane  and  the  sugar  beet.  For 
instance,  the  Louisiana  sugar  cane  contains  19%  to  40%  of  sugar 
while  sugar  beets  contain  from  12  7o  to  18%  of  sugar.  Sorghum 
contains,  in  the  staff  at  the  time  the  seed  is  matured  and  the 
starch  hardened,  from  9%  to  15%  of  sugar,  according  to  the  re- 
port of  the  United  States  Department  of  Agriculture. 

"In  packing  fruit  for  the  market,  such  as  apples,  grapes,  etc., 
only  sound  fruit  is  selected;  that  which  is  in  any  way  bruised 
or  in  the  first  stages  of  decay  is  thrown  out.  Instead  of  allowing 
this  refuse  to  go  to  waste,  it  can,  by  the  use  of  electrically  oper- 
ated presses,  or  stills,  be  turned  into  cider  or  grape  juice.  The 
pumice  which  remains  can  be  used  as  a  fertilizer  for  the  soil. 
The  amount  of  electric  energy  needed  to  operate  the  machinery 
necessary  for  such  purposes  is  much  less  than  five  horse  power. 
One  of  the  portable  outfits  used  for  various  purposes  can  take 
care  of  these  outfits  during  the  time  that  it  is  in  operation. 

"Farm  products  from  which  starch  may  be  obtained  as  a  by- 
product are  the  potato  and  cassava;  the  American  potato  con- 
tains 15%  to  207o  of  starch,  which  in  turn  may  be  converted  into 
alcohol.  In  many  instances,  potatoes  are  accidentally  frozen  by 
exposure  to  severe  frosts,  or  are  sometimes  frozen  in  storage.  In 
Europe,  potatoes  in  such  condition  have  still  some  value,  yield- 
ing a  considerable  percentage  of  alcohol  of  high  strength.  This 
practice  of  converting  frozen  potatoes  into  alcohol  is  a  common 
practice  in  Germany. 

"In  recent  German  reports,  in  bringing  out  facts  on  electric- 
ally operated  farms,  it  is  shown  that  since  the  government  has 
taken  an  active  interest  in  the  matter,  a  number  of  plants  have 
been  installed  for  drying  the  leaves  of  the  potato  and  the  beet, 
to  be  used  as  food  for  cattle,  because  they  are  so  high  in  protein 
or  fat  producing  elements.  Germany  used  to  buy  $8,000,000 
worth  of  cattle  food  from  foreign  countries.  The  records  show 
that  there  are  yearly  24,000,000  tons  of  green  leaves  for  drj-ing, 
giving  about  6,000,000  tons  of  preser^^ed  good  food  stuff,  of  a 
value  of  nearly  $12,000,000." 

"In  1901,  when  the  potato  crop  of  Germany  was  53,682,010 


280  THE  PRICE  OF  INEFFICIENCY 

short  tons,  efforts  were  made  to  discover  practical  and  economical 
methods  for  preserving  the  potatoes,  so  that  the  surplus  could  be 
preserved  and  used  for  supplying  subsequent  demands,  without 
the  loss  due  to  storing  potatoes  in  silos  or  bins.  When  put  into 
bins  for  storage,  their  value  shrinks  10%,  which  would  mean  a 
total  loss  of  $25,000,000.  At  present  there  are  436  plants  estab- 
lished in  Germany  for  drying  potatoes,  with  an  estimated  pro- 
duction annually  of  110,230  to  165,345  short  tons,  or  3,674,000 
to  5,511,500  bushels. 

' '  The  process  of  preserving  potatoes  is  washing,  drying,  peeling 
and  cutting  and  again  drying,  and  the  product  is  finally  placed 
on  the  market  in  the  form  of  potato  flakes.  The  prices  vary  from 
1^  to  If  cents  per  pound. 

"A  large  part  of  the  German  potato  yield  is  converted  into 
the  so-called  potato  flour,  and  sold  at  retail  in  the  groceries 
throughout  Europe  for  cooking  purposes.  There  is  also  a  flour 
produced  by  grinding  and  bolting  dried  potatoes,  but  this,  how- 
ever, is  a  comparatively  new  product. 

"There  are  many  vegetables  and  plants  grown  on  the  farm 
which  can  be  converted  into  one  form  of  by-product  or  another, 
especially  for  the  manufacture  of  alcohol.  There  is  over  20% 
of  starch  in  the  South  Carolina  sweet  potato  and  as  high  as  2,600 
pounds  of  starch  per  acre  have  been  produced. 

"The  average  yield  of  sweet  potatoes  per  acre  is,  of  course, 
much  less  than  in  the  above  cited  South  Carolina  case,  where 
heavy  fertilization  was  employed.  On  plots  to  which  fertilizer 
was  not  added,  the  yield  was  about  8,000  pounds  of  sweet  potatoes 
per  acre,  yielding  in  round  numbers  about  1,900  pounds  of  starch. 
The  quantity  of  sugar  in  the  8,000  pounds  is  about  350  pounds, 
which  makes  about  1,250  pounds  of  fermentable  matter.  This 
can  be  turned  into  industrial  alcohol  yielding  about  160  gallons 
of  95%  proof. 

' '  The  need  for  an  efficient  lighting  system  is  well  recognized  as 
being  of  equal  importance  for  the  country  as  well  as  for  the  city. 
It  will  assist  in  fixing  hours  of  labor  as  they  are  in  the  city,  which 
is  necessary  to  satisfy  the  just  demands  of  the  farm  hands,  as 
well  as  others  living  in  the  country.  In  consequence  of  better 
light,  greater  efficiency  and  cleanliness  are  secured  all  around, 
fire  risks  are  diminished  and  insurance  rates  are  reduced.  Elec- 
tric lamps  require  no  matches  and  burn  without  flame  and  con- 
suming no  oxygen  do  not  vitiate  the  air  of  the  room.  Electric 
lighting  is  of  particularly  great  service  in  stables  and  bams, 


UNDEVELOPED  RESOURCES        281 

where  the  use  of  lanterns  has  caused  numerous  fires  and  destroyed 
millions  of  dollars  worth  of  property.  Electric  lights  are  turned 
on  and  off  by  a  suitable  switch  located  at  any  convenient  point 
and  are  unaffected  by  any  change  in  weather  conditions. 

"Another  great  advantage  in  using  electric  illumination  is  that 
similar  to  the  street,  the  yard  and  field  may  be  lighted  and  con- 
trolled from  the  residence.  This  feature  is  especially  conven- 
ient when  in  the  fall  of  the  year,  harvesting  is  necessarily  carried 
on  after  dusk,  in  order  to  ward  off  any  changes  due  to  weather 
conditions.  In  such  eases,  the  field  under  the  harvesters  can  be 
illuminated  to  advantage  and  work  continued  long  after  night- 
faU. 

"Electricity  is  a  ready  servant  for  cooking  or  heating.  No 
heat  is  wasted  as  in  a  coal  or  Avood  stove ;  all  heat  is  concentrated 
in  the  one  piece  of  apparatus  being  used.  The  cost  of  operating 
a  small  electric  range  is  in  almost  all  cases  cheaper  than  burning 
wood  or  coal.  In  many  instances,  electric  current  can  be  bought 
for  5  cents  per  kilowatt  hour,  and  as  the  average  price  of  gas 
throughout  the  country  is  $1.50  per  thousand  cubic  feet,  the 
cost  of  electric  cooking  is  the  same  as  that  done  by  a  gas  range, 
provided  there  is  no  heat  wasted  on  a  gas  range,  which  is  hardly 
avoidable.  This  is  not  taking  into  account  that  when  one  has 
his  OMTi  generating  set,  current  can  be  generated  for  1  or  2  cents 
per  kilowatt  hour.  Further  it  must  be  borne  in  mind  that  elec- 
tric cooking  means  perfect  cleanliness.  There  is  no  soot  or  smoke 
and  as  far  as  convenience  is  concerned,  all  that  is  necessary  is  to 
turn  a  switch. 

' '  In  country  residences,  where  during  certain  hours  of  the  day 
little  cooking  is  carried  on,  such  as  making  coffee,  boiling  eggs, 
preparing  toast  or  supplying  heat  to  chafing  dishes,  all  is  done 
in  a  few  minutes,  right  before  your  eyes  on  the  dining  table  itself. 

"The  heating  of  flatirons  by  means  of  electricity  has  proven 
one  of  the  greatest  boons  to  the  household.  The  electric  flatiron 
is  so  constructed  that  the  current  is  supplied  to  the  iron  during 
use,  and  it  maintains  its  working  temperature,  does  not  overheat 
and  accidentally  scorch  the  work,  and  is  kept  ready  for  work 
at  a  minimum  cost.  As  no  stove  is  necessary,  there  is  no  con- 
stant change  of  irons,  also  no  intense  radiation  of  heat  into  the 
room  to  make  the  operation  more  tiresome,  and  in  the  summer 
particularly  trying. 

"Other  electric  heating  appliances  for  household  convenience 
are  electrically  operated  facial  and  scalp  massage  apparatus, 


282  THE  PRICE  OF  INEFFICIENCY 

foot  warmers,  heating  pads  and  bed  warmers,  radiators,  etc. 
Many  of  them  are  conveniently  applied  to  country  hospitals  and 
sick  rooms;  among  the  appliances  especially  made  for  hospital 
use  are  sterilizers.  X-ray  apparatus,  cauterizers,  electric 
blankets,  ozonizers,  etc. 

"These  by  no  means  comprise  the  entire  list  of  necessary  and 
convenient  appliances  which  can  be  found  to-day.  New  devices 
are  appearing  every  day,  so  that  at  the  present  time  there  is 
hardly  a  household  or  farm  where  electric  energy  through  the 
skill  of  the  engineer  could  not  supplant  many  of  the  most  la- 
borious operations. 

''At  the  present  time,  fully  90%  of  all  skilled  labor  comes 
under  the  supervision  of  the  engineer,  who  has  taken  ad- 
vantage of  the  various  kinds  of  natural  resources,  and  has  built 
up  the  great  industries  which  we  have  to-day.  Our  nearly  seven 
million  farmers  in  the  United  States  should  in  a  similar  way 
take  advantage  of  the  engineer,  who  is  especially  capable  in  the 
art  of  development  and  husbanding  of  the  natural  resources 
through  the  medium  of  electric  energy,  for  our  agrarian  indus- 
tries, upon  which  not  only  financial  standing  is  dependent,  but 
the  general  welfare  of  the  country  as  a  whole." 

The  technical  man  in  Germany  has  done  wonders  for  agricul- 
ture. By  the  development  of  fertilizers  Germany  averages  31^ 
bushels  of  wheat  per  acre  to  13  in  America,  rye  29  to  16,  oats 
51  to  25,  and  potatoes  158  to  83.  If  American  farmers  should 
increase  their  yields  to  the  German  averages,  it  would  mean  a 
gross  output  of  products  which  could  not  be  raised  under  pres- 
ent methods  on  a  country  twice  as  large  as  ours. 

Yet  Germany  was  formerly  but  little  if  any  in  advance  of 
America,  and  these  yields  are  made  on  soils  in  use  for  centuries 
before  America  was  discovered.  The  scientific  selection  of  seed 
and  use  of  fertilizer  has  told  the  story.  Two  thousand,  six  hun- 
dred and  fifty  pounds  of  potash  salts  and  manure  are  used  per 
acre  in  Germany  on  cultivated  lands  while  but  311  pounds  are 
used  in  the  United  States.  The  German  farmer  practically  uses 
his  land  as  mechanism  for  transforming  fertilizer  into  products, 
while  the  American  scrapes  and  scratches  along  trying  to  get 
products  out  of  his  land  without  feeding  any  raw  material  what- 
ever into  it. 


CHAPTER  XVIII 
THE  PROBLEM  OF  IMMIGRATION 

The  fundamental  chanj^e  in  recent  immigration — Floating  immigration 
and  its  financial  effects — America  as  an  apple  orchard — The  respon- 
sibility of  the  Anuerican  of  to-day  to  the  American  of  the  future — 
The  Iberic  and  Slavonic  menace — Lowering  the  level  of  American  pros- 
perity— ^The  sullen  negro — Orientalism — The  flood  of  yellow  blood  at 
our  western  gates — Governmental  inefficiency  in  congested  immigra- 
tion— American  emigration,  a  new  phenomena — The  movement  to  the 
Canadian  northwest — The  ebb  and  flood  of  immigration. 

The  most  vital  and  important  problem  of  the  United  States 
is  and  has  long  been  immigration.  To  what  extent  it  should 
be  cheeked,  if  at  all,  the  question  of  the  varying  races  and  the 
ultimate  effect  on  the  standard  of  living  and  character  of  the 
nation  which  will  result  from  unregulated  immigration  need 
long  consideration. 

Immigration  in  principle  needs  no  discussion.  Without  im- 
migi-ation,  America  would  still  be  a  wilderness  tracked  by  a 
few  savages.  But  if  the  whole  world  crowded  here,  we  should 
have  all  the  problems  that  they  have  and  others  in  addition. 
There  is  thus  a  happy  medium  to  be  achieved. 

In  the  first  two  or  three  centuries,  immigration  was  not  im- 
migration in  the  present  sense,  but  pioneering,  and  the  early 
settlers  came  to  make  their  homes  in  the  \^■ilderness.  During 
the  middle  of  the  last  century,  the  immigrants  still  came  largely 
as  settlers,  in  the  spirit  of  pioneering,  but  towards  the  latter  part 
of  the  century  and  at  the  present  time,  immigration  has  taken 
on  a  new  character  and  while  a  considerable  portion  of  it  is 
comprised  of  intending  settlers,  it  contains  a  large  proportion 
of  what  may  be  tenned  floating  labor,  a  current  of  workmen 
drawn  by  higher  wages;  to  return  to  their  own  countries  with 
the  surplus  they  have  obtained  when  conditions  render  their 
employment  here  less  lucrative. 

Another  feature  of  immigration  at  the  present  time  which  is 
of  grave  concern  is  the  fact  that  the  bulk  of  it  is  of  Iberic  and 
Slavonic  character,  an  entirely  different  blood  from  the  Teu- 

283 


284  THE  PRICE  OF  INEFFICIENCY 

tonic,  Celtic  and  Anglo-Saxon  which  constituted  the  principal 
part  of  the  immigration  up  to  a  generation  ago,  and  which 
blended  readily  with  the  native  population. 

This  vast  influx,  a  million  a  year,  of  races  of  a  different  char- 
acter, and  almost  without  exception  of  examples  of  such  races 
drawn  from  the  lowest  orders,  if  it  continues,  will  transform 
the  race.  The  American  of  the  third  century  of  the  republic 
will  be  a  different  person  from  the  American  of  the  first  and 
second  centuries  of  the  republic ;  in  fact  he  will  be  a  new  amal- 
gam, not  before  produced  in  the  melting  pot  of  the  world,  for 
not  alone  will  he  be  of  mixed  blood,  but  the  effect  of  the  climate, 
soil  and  latitude  of  North  America,  will  produce  a  race  never 
before  known. 

It  is  within  the  power  of  the  American  people  of  to-day  to 
decide  the  complection  of  this  future  race  which  will  be  their 
inheritors,  and  whether  the  Iberic  and  Slavonic  elements  are  to 
influence  it  in  the  proportion  indicated  by  the  present  vast  flood 
of  immigration. 

Whether  this  proportion  will  continue  is  doubtful.  It  would 
appear  that  the  United  States,  so  full  of  possibilities,  has  actu- 
ally drained  Western  Europe  of  the  available  supply  of  immi- 
grants. A  condition  of  eqviilibrium  exists  between  the  de- 
mands of  America  and  the  demands  of  the  home  countries. 
England  sends  us  few  immigrants  and  fewer  of  them  take  out 
naturalization  papers.  The  immigration  from  Germany  is  less 
than  a  tenth  of  w^hat  it  was  formerly,  while  Ireland  has  few  to 
send. 

In  a  reasonable  length  of  time  the  southern  and  eastern 
European  countries  may  also  be  drained  and  immigration  may 
cease  as  compared  with  its  present  volume. 

What  this  signifies  is  pointed  out  by  Henry  P.  Fairchild  of 
Yale  University,  in  a  communication  to  the  New-  York  Times, 
October  14,  1911 : 

''If  it  is  true  that  from  now  on  the  stream  of  immigration 
to  this  country  is  to  be  a  diminishing  one,  irrespective  of  any 
increased  stringency  in  the  matter  of  selection  and  admission, 
it  can  mean  only  one  thing — that  the  United  States  no  longer 
enjoys  such  a  position  of  economic,  social  and  political  super- 
iority to  the  other  nations  of  the  world  as  to  make  it  worth 
while  for  foreigners  to  take  the  trouble  to  come  here.  Gen. 
Francis  A.  Walker  long  ago  said  that  immigration  of  the 
lowest  class  'will  not  be  permanently  stopped  so  long  as  any 


THE  PROBLEM  OF  IMMIGRATION  285 

difference  of  economic  level  exists  between  our  population  and 
that  of  the  most  degraded  communities  abroad.'  Modern  au- 
thorities agree  that  the  volume  of  immigration  responds 
directly  to  the  conditions  of  economic  prosperity  in  this  coun- 
try. 

"At  the  beginning  of  its  National  life,  the  United  States 
enjoyed  such  natural  advantages  as  made  it  worth  while  for 
the  citizens  of  the  most  advanced  of  the  older  nations  to  try 
their  lot  in  the  new  world.  Many  of  these  advantages  are 
already  gone,  and  as  stated  in  your  article,  the  better  class  of 
immigrants  are  now  seeking  other  lands.  Argentina  gets  the 
North  Italians  while  the  South  Italians  come  to  us.  Canada, 
w^hile  encouraging  and  soliciting  immigration  from  Northern 
and  Western  Europe,  discriminates  frankly  and  effectively 
against  natives  of  the  southern  and  eastern  portions  of  that  con- 
tinent. In  our  own.  case,  the  so-called  'new'  immigration 
vastly  outnumbers  the  'old.'  And  there  are  still  plenty  to 
come.  Barring  any  further  legal  restrictions,  they  will  con- 
tinue to  come  from  ever  lower  and  lower  sources  until  con- 
ditions in  the  United  States  so  closely  resemble  those  in  the 
most  unfortunate  foreign  countries  that  it  is  no  longer  worth 
while  to  make  the  effort. ' ' 

One  of  the  most  ominous  problems  of  America  to-day,  but 
one  which  from  long  familiarity  has  made  itself  to  a  large 
extent  an  unrealized  problem,  is  the  result  of  a  form  of  immi- 
gration in  the  past.  It  is  the  problem  of  the  negi'o,  who  was 
compelled  to  enter.  Those  who  do  not  understand  the  negro 
problem,  wonder  at  the  violence  it  arouses. 

If  left  to  solve  itself,  the  negro  problem  would  be  settled  by 
a  gradual  absorption  of  the  race  into  the  white  race,  and  the 
result  would  be  a  contamination  of  the  whites,  until  America 
would  be  a  negroid  country,  its  racial  purity  forever  lost. 
The  most  vigorous  restrictions  are  therefore  necessary  to  pre- 
vent intermarriage  of  blacks  and  whites.  Similarly  the  first 
view  of  the  Chinese  problem  is  that  their  cheap  labor  would 
develop  the  country.  Nevertheless  the  hordes  of  Chinese  that 
would  be  attracted  would  form  a  condition  far  worse  than  the 
negroes,  who  are  not  too  numerous  to  be  controlled.  The  in- 
fusion of  Chinese  blood  that  would  result  through  the  peculiar 
attraction  of  white  women  for  the  Chinese,  would  in  a  few  gen- 
erations produce  a  mongolianized  Caucasian,  a  mysterious, 
possibly  defective  and  certainly  inferior  race,  which  would  in 


286  THE  PEICE  OF  INEFFICIENCY 

time  be  totally  submerged  by  the  increasing  influx  of  Chinese, 
until  America  would  become  a  Chinese  country  with  the  Mon- 
golians slightly  caucasianized. 

To  a  lesser  degree  the  immigration  of  all  races  having  oriental 
characteristics  is  charged  with  a  similar  danger. 

Against  such  a  possibility,  the  policy  of  the  United  States 
has  been  definitely  settled.  Chinese  exclusion  is  a  policy  more 
immutable  than  most  of  the  provisions  of  the  constitution 
itself. 

That  the  United  States  needs  immigrants  of  the  proper  char- 
acter, however,  is  beyond  question.  There  are  only  38  persons 
per  square  mile  in  the  country  as  against  359  in  Great  Britain, 
290  in  Germany  and  629  in  Belgium,  and  while  the  latter  coun- 
tries have  more  than  they  should  have,  that  is  a  population 
which  is  so  numerous  that  they  could  not  gain  a  livelihood  from 
that  portion  of  the  earth's  surface  on  which  they  reside  did 
they  not  draw  supplies  from  elsewhere,  the  sparse  population 
of  the  United  States  makes  it  certain  that  for  many  years  we 
shall  have  a  place  for  all  the  desirable  immigrants  that  may 
wish  to  come. 

The  real  problem  of  immigration  at  the  present  time  is  one 
that  has  been  created  by  governmental  inefficiency,  that  is  the 
lack  of  proper  means  of  distribution  of  the  immigration.  "With 
an  appalling  lack  of  foresight,  the  government  has  allowed  the 
immigrants,  particularly  during  the  last  ten  or  twenty  years, 
to  accumulate  in  the  big  cities  along  the  eastern  seaboard. 
These  cities  are  made  cosmopolitan  in  character  and  thus  differ 
from  the  normal  American  cities.  Conditions  of  over  crowd- 
ing arise  and  other  evils  of  congestion  of  population,  while  the 
demand  for  labor  in  other  places  remains  unsatisfied. 

Governmental  inefficiency  extends  also  to  the  manner  in 
which  the  immigrant  is  treated  during  the  process  of  distribu- 
tion. The  alien  arriving  in  the  land  of  freedom  too  often  finds 
that  freedom  means  for  practical  purposes,  a  license  to  private 
bankers,  notaries  public,  lav^^yers,  collection  agents,  insurance 
companies,  real  estate  agents,  employment  agents,  benevolent  so- 
cieties and  naturalization  clubs,  to  cheat  and  rob  him.  The  first 
annual  report  of  the  Bureau  of  Industries  and  Immigration  of 
the  New  York  State  Department  of  Labor,  states  that:  in  the 
matter  of  transportation  the  combination  of  steamship  agents, 
emigrant  hotels,  runners,  porters,  expressmen  and  cabmen 
throughout  the  country,  operating  chiefly  through  New  York 


THE  PROBLEM  OF  IMMIGRATION  287 

City,  forms  one  of  the  most  stupendous  systems  for  fleecing  the 
aliens,   from   the   time   he    leaves   his   home   country   until   he 
reaches  his  destination  in  America,  and  vice  versa. 
The  report  says: 

"In  labor  camps  aliens  are  discriminated  against  in  regard 
to  housing,  sanitation,  food  supplies,  and  employment  methods, 
being  denied  the  ordinary  decencies  of  life;  aliens  are  checked 
and  tagged,  amounts  ordered  by  the  padroni  are  deducted  from 
their  wages  without  their  knowledge  or  express  sanction,  and 
exploitations  occur  in  hospital  charges  and  the  purchase  of  sup- 
plies. 

"The  private  banking  laws  are  affording  only  a  small  meas- 
ure of  protection  owing  to  evasions  of  the  law,  and  no  protec- 
tion whatsoever  outside  of  cities  of  the  first  class;  frauds  in 
the  sale  of  homes  to  aliens  by  means  of  the  solving  of  puzzles 
or  by  means  of  excursions  arranged  to  interest  aliens  in  'show' 
pieces  of  property,  or  by  other  means,  are  widespread  and  the 
settlement  of  affairs  in  the  old  country,  when  an  alien  wishes 
to  settle  here,  is  in  the  hands  of  a  most  unscrupulous  class  of 
lawyers,  notaries  public,  collection  agents,  information  bureaus, 
and  protective  leagues." 

The  report  of  the  Commissioner  General  of  Immigration 
shows  that  the  trend  of  immigration  is  now  upward  and  is 
rapidly  increasing  and  reassuming  the  proportions  which  pre- 
vailed prior  to  the  fiscal  year  of  1908.  During  the  past  year, 
the  number  of  aliens  coming  as  immigrants  was  1,041,570.  As 
the  later  months  of  the  year  show  a  greater  proportionate  in- 
crease than  the  earlier,  it  seems  likely  that  the  ensuing  year 
AA-ill  witness  a  still  nearer  approach  to  the  largest  record  so  far 
made,— that  for  the  fiscal  year  1907,  viz.  1,285,349. 
The  report  continues: 

"Of  particular  interest  with  regard  to  the  1,041,570  immi- 
grants entering  the  country  (1910)  are  the  following  statistics: 
Of  these,  120,509  were  under  fourteen  years  of  age,  868,310 
were  between  the  ages  of  14  and  44  and  52,751  were  45  or  over. 
As  to  literacy,  253,569  could  neither  read  nor  write  and  4,571 
could  read  but  not  write.  These  figures  include  no  aliens 
under  14  years  of  age,  which  indicates  a  decrease  in  illit- 
eracy from  29%  of  the  total  in  1909  to  28%  of  the  total  in 
1910.     In  1908  the  ratio  was  26%;  in  1907,  30%  and  in  1906, 

28%. 

"The  total  amount  of  money  brought  to  the  country  by  ar- 


288  THE  PRICE  OF  INEFFICIENCY 

riving  aliens  calculated  on  the  not  altogether  reliable  basis  of 
amounts  shown  at  time  of  arrival,  was  $28,187,745  or  an  aver- 
age of  about  $27  a  person. 

''During  the  fourteen  months  prior  to  September,  1912,  the 
1,114,989  aliens, — immigrants  as  well  as  aliens  temperorarily 
here — brought  $46,712,697.  The  immigrants  had  an  average 
of  $38  per  capita  in  the  fiscal  year  to  July  1  and  $40  per  capita 
during  the  two  following  months. 

"There  is  no  way,  of  course,  to  determine  how  much  of  this 
consisted  of  money  sent  to  the  applicants  by  friends  or  rela- 
tives living  in  the  United  States.  Concerning  payment  of  pas- 
sage, 755,453  claimed  to  have  bought  their  own  tickets  while 
274,204  admitted  that  they  had  been  assisted  in  this  regard  by 
relatives  and  11,913  that  they  had  been  so  assisted  by  friends. 
According  to  the  statement  of  the  aliens  themselves,  it  there- 
fore appears  that  over  25%  of  the  total  number  admitted  were 
assisted  to  reach  this  country. 

"It  is  still  true  that  the  bulk  of  our  immigration  is  being 
drawn  from  the  countries  of  southern  and  eastern  Europe, 
Italy,  Austria-Hungary,  Greece,  Turkey  in  Europe,  and  the 
smaller  principalities  adjacent,  and  Russia  supplied  about  68% 
of  the  immigrants  admitted  in  1910.  In  the  year  1909,  these 
same  countries  furnished  67%.  This  is  in  marked  contrast  to 
the  immigration  of  former  times. 

"During  the  year,  it  was  necessary  to  turn  back  at  the  ports, 
24,270  aliens,  or  about  2%  of  the  total  number  applying  for 
admission.  The  corresponding  total  and  percentage!  for  the 
year  1909  was  10,411,  or  1.1%. 

"During  the  year  202,436  aliens  left  the  United  States. 
Concerning  34,043  of  these,  it  has  not  been  possible  to  secure  a 
record  of  the  period  during  which  they  have  lived  here,  as  they 
departed  across  the  Canadian  border.  It  appears  that  13,841 
were  less  than  14;  167,440  ranged  from  14  to  44,  and  21,255 
were  45  years  of  age  or  over;  while  136,159  had  resided  in  the 
United  States  less  than  5  years;  23,969  from  5  to  10  years; 
3,877  from  10  to  15  years;  2,310  from  15  to  20  years,  and"^ 2,078 
over  20  years. 

"Of  common  unskilled  laborers,  215,300  immigrated  and 
89,393  emigrated ;  as  compared  with  138,570  members  of  the 
skilled  trades  immigrating  and  21,574  emigrating.  These 
should  be  compared  further  with  the  figures  for  the  fiscal  year 
of  1909   as  follows:     Unskilled  laborers,   174,800  immigrating 


THE  PROBLEM  OF  IMMIGRATION  289 

and  118,926  emigrating;  and  skilled  laborers,  87,160  immigrat- 
ing and  21,919  emigrating." 

Emigration  from  the  United  States  is  large  in  volume  but 
mostly  confined  to  the  floating  labor  class,  whose  average  exodus 
is  about  40%  of  the  whole  number  of  immigrants.  Three- 
quarters  of  them,  after  leaving  America  do  not  re-immigrate, 
but  one-fourth  or  10%  of  the  whole  number  come  back  again, 
so  that  taking  the  figures  for  1910,  1,041,570  immigrants,  30% 
will  sooner  or  later  depart  for  good,  while  10%  have  been  here 
before,  so  that  the  net  increase  is  about  600,000. 

The  year  in  which  the  greatest  exodus  took  place  was  1907, 
the  year  of  the  panic,  when  711,000  returned.  The  panic  being 
one  largely  arising  out  of  artificial  conditions  created  by  gov- 
ernmental neglect,  thus  threw  this  number  of  men  out  of  work 
who  were  able  to  get  away.  What  its  loss  was  to  the  ones  who 
did  not  care  to  go,  or  could  not  emigrate  and  the  native  popu- 
lation it  is  difficult  to  calculate.  Wliat  this  vast  army  of  labor- 
ers who  went  back  could  have  earned  for  themselves  and  for  the 
country  had  they  been  able  to  remain  is  also  an  enormous 
figure. 

Considering  the  value  of  a  wage  earner  as  $1,700,  which  is 
the  estimate  of  the  National  Conservation  Commission  and 
estimating  that  of  the  711,000  emigrants  who  returned  in  1907, 
500,000  were  wage  earners,  the  capital  loss  to  the  country  by 
their  withdrawal  amounts  to  some  $850,000,000. 

According  to  a  special  report  of  the  Census  Office,  1907,  the 
wealth  of  the  nation  in  1904,  including  the  value  of  real  prop- 
erty, and  everything  having  a  commercial  value,  was  $107,104,- 
192,410  as  has  been  given,  or  200  times  the  wealth  of  a  Rocke- 
feller. In  1900  the  value  was  $88,517,306,775,  so  tliat  at  the 
present  time  it  is  probable  that  the  wealth  is  not  less  than  125,- 
000  millions.  There  are  some  33,000,000  wage  earners,  and  at 
a  calculation  of  $1,700,  they  amount  to  $56,100  millions,  making 
the  total  wealth  of  the  country  $181,000  millions. 

Of  the  1,000,000  immigrants  annually  coming  in,  not  less 
than  400,000  are  wage  earners,  while  half  the  remainder  be- 
comes wage  earners.  Their  value  would  be  $1,190,000,000 
added  to  the  capital  of  the  country  annually,  and  as  they  bring 
not  less  than  $28,000,000  in  money  with  them,  the  total  is 
$1,218,000  millions,  which  is  more  than  two  thirds  of  1%  annually 
of  the' entire  wealth  of  the  country.  This  means,  for  example, 
that  the  owner  of  real  estate  worth  $10,000  finds  on  account  of 


290  THE  PRICE  OF  INEFFICIENCY 

immigration  that  the  value  of  his  property  is  increased  at  the 
end  of  a  year  to  $10,067. 

The  emigration  from  the  United  States  consists  of  those  who 
return  after  coming  here,  and  a  considerable  flow  of  very  valu- 
able emigrants  into  the  Canadian  northwest.  This  amounts  to 
about  100,000  annually,  mostly  well-to-do  farmers,  and  the 
Canadian  government  estimates  that  they  bring  an  average  of 
$1,000  each  into  the  country.  Assuming  that  two-thirds  are 
wage  earners,  the  loss  to  the  United  States  is  $213,333,333  an- 
nually, a  particularly  large  drain  owing  to  the  high  class  of 
the  emigrants,  in  most  cases  farmers  who  have  sold  their  farms 
in  America  and  who  are  going  to  Canada  to  take  advantage 
of  the  rich  lands  and  better  government  there. 

The  average  return  of  immigrants  is  about  200,000,  a  value 
of  $340,000,000,  and  as  it  is  estimated  that  the  total  of  money 
which  they  take  back  with  money  sent  home  by  other  emigrants 
amounts  to  $400,000,000,  there  is  thus  a  loss  of  $740,000,000 
from  this  cause. 

Another  loss  to  the  country  is  in  the  emigrants  of  great 
wealth,  who  permanently  remove  to  foreign  countries  to  reside 
and  who  drain  a  constant  income  from  America  in  addition  to 
large  capital  withdrawals.  Among  this  class  of  emigrants  are 
the  wealthy  women  who  marry  titled  foreigners,  and  it  is  esti- 
mjated  that  not  less  than  $100,000,000  annually  is  withdrawn 
through  this  channel.  Including  the  exodus  to  Canada  and  the 
general  withdrawals,  the  country  loses  annually  $1,053,333,333. 
In  addition  are  large  sums  spent  by  our  temporary  emigrants, 
the  tourists,  for  whose  patronage  an  established  and  well  or- 
ganized propaganda  is  carried  on  in  various  foreign  countries. 
Without  the  immigrants  with  their  inbringing  of  $1,218,000,000 
the  country  would  suffer  a  heavy  loss  from  its  wealthy 
emigrants. 

A  tendency  which  is  rapidly  growing  on  the  part  of  alien 
nationalities  and  races  and  one  which  is  open  to  serious  crit- 
icism is  that  of  adopting  anglicized  patronymics  or  in^  many 
cases  names  of  purely  anglo-saxon  or  eeltic  origin.  This  sail- 
ing under  false  colors  tends  to  debase  the  old  and  dignified 
stock  of  names  and  to  conceal  the  origin  and  characteristics  of 
the  wearers  of  the  borrowed  plumage.  It  is  largely  resorted  to 
for  purposes  of  commercial  and  social  advantages  and  conse- 
quently is  of  disadvantage  to  those  legitimately  bearing  the 
original  names. 


THE  PROBLEM  OP  IMMIGRATION  291 

It  is  a  practice  which  should  properly  be  frowned  upon  by 
courts  within  whose  province  it  is  to  permit  changes  of  names 
to  be  made. 

In  cases  where  the  foreign  name  is  unpronounceable  or  ridic- 
ulous, it  should  be  permissible  to  alter  it  only  to  the  extent 
necessary  to  make  it  useable,  it  being  allowed  to  be  in  no  case 
so  changed  as  to  conceal  its  origin. 

The  changing  of  names  by  immigrants  has  been  severely  crit- 
icized for  legal  reasons.  The  New  York  Times  in  an  editorial 
published  December  15,  1912,  states: 

Immigrants  who  assume  the  historic  names  of  New  England- 
ers,  like  Endicott,  Lowell,  Adams,  Lawrence,  or  Peabody,  are 
not  only  flouting  their  own  ancestry,  in  which  they  should  have 
pride,  but  they  are  making  trouble  for  the  courts.  Chairman  A. 
T.  Clearwater  of  the  New  York  State  Bar  Association's  Law 
Reform  Committee  says : 

"It  is  not  so  much  the  philological  phase  of  the  matter  which 
engages  the  attention  of  the  bar,  as  it  is  the  opportunities  for 
fraud,  the  confusion  as  to  ancestry  and  descendants,  the  errors 
and  perplexities  arising  in  the  search  for  and  authentication  of 
title  to  real  estate,  all  of  which  seem  to  us  grave  enough  to  re- 
quire legislative  action." 

Among  the  reasons  which  cause  the  immigrant  to  change  his 
name  is  the  disappointment  which  he  feels  when  he  becomes 
acquainted  with  conditions  in  this  country  and  finds  that  the 
glo^dng  prospects  which  he  had  in  expectation  are  so  difficult 
of  realization. 

America  is,  in  the  oratorical  phrase,  a  country  of  unbounded 
possibilities,  but  for  the  immigrant  it  proves  rather  a  country 
of  will-o'-the-wisp  opportunities.  The  immigrant  with  a  little 
money  in  his  pocket  finds  it  gone  before  he  gets  well  located 
and  then  begins  the  struggle  for  existence,  a  kind  of  a  life  in 
a  swamp  of  immediate  necessities  surrounded  by  rainbows  of 
opportunity  wherever  he  turns.  He  remains,  however,  pretty 
well  stuck  in  the  swamp  and  among  the  schemes  of  a  certain 
class  of  immigrant  for  changing  his  luck,  is  that  of  changing 
his  name,  which  is  of  course  merely  another  will-o'-the-wisp 
for  all  save  a  few  of  the  more  unscrupulous. 

Many  an  immigrant  finding  America  disappointing,  is  often 
asked  why  he  does  not  go  back  instead  of  remaining  here  and 
bewailing  his  lot.  The  principal  reason  is  that  he  seldom  has 
the  price  of  a  ticket  in  his  pocket,  or  if  he  has,  he  prefers  to 


292  THE  PRICE  OF  INEFFICIENCY 

put  it  into  some  scheme  in  the  hope  of  making  a  large  sum. 
When  it  is  lost,  the  same  process  is  repeated  as  he  acquires  the 
American  habit  of  depending  on  some  sudden  turn  of  fortune 
to  lift  him  out  of  the  rut. 

Even  should  he  be  able  to  pay  his  fare  back,  he  would  have 
to  return  to  face  his  relatives  and  former  friends  with  the  ad- 
mission of  failure  in  America  which  would  promptly  be  charged 
against  him  and  not  against  America.  Even  willing  to  endure 
this,  he  would  be  compelled  to  start  all  over  again  in  the  old 
country  with  its  settled  customs  which  are  not  adapted  to  get- 
ting rich  quick,  and  where  he  would  be  at  a  great  disadvantage 
on  account  of  the  spirit  of  speculation  which  he  acquired  in 
America  and  which  he  would  have  no  means  of  gratifying. 

Thus  the  immigrant,  however  dissatisfied  and  however  much 
worse  off  than  abroad,  continues  to  stick  to  America  in  the  hope 
of  the  stroke  that  will  some  day  make  him  independent  if  not 
wealthy. 

Even  those  who  acquire  a  competency  seldom  return,  as  by 
that  time  they  are  Americanized  and  prefer  not  to  go  back  to 
the  more  formal  and  restricted  channels  of  European  life. 
And  in  addition,  having  made  some  money  they  are  eager  to 
make  a  great  deal  more,  an  appetite  which  can  never  be  ap- 
peased. 

Immigration  is  not  a  German  problem,  and  it  is  constantly 
decreasing  in  importance,  since  the  number  of  those  emigrating 
is  much  less  than  formerly,  owing  to  improved  conditions,  while 
the  number  of  immigrants  is  small. 

According  to  Consul  General  T.  St.  John  Gaffney,  of  Dres- 
den in  the  Daily  Consular  and  Trade  Report,  Oct.  2,  1911, 
there  were  588,354  foreign  workmen  employed  in  Germany  last 
year.  Of  this  number,  350,000  were  engaged  in  farming. 
There  were  323,326  Poles,  82,092  Luthenians,  23,209  Hungar- 
ians and  39,672  Russians  and  Austrians. 

The  negro  problem,  too,  is  not  a  German  problem,  as  there 
are  but  one  or  two  in  each  city,  usually  bar  tenders  in  American 
style  bars,  or  servants;  and  so  little  is  race  prejudice  un- 
derstood that  they  associate  freely  with  white  people.  Indeed, 
the  negro  in  Germany  is  looked  upon  as  a  very  good  fellow, 
and  held  somewhat  in  the  regard  that  an  Indian  is  by  the 
American  small  boy. 


CHAPTER  XIX 
THE  RIGHT  TO  WORK 

The  duty  and  policy  of  the  state — Bismarck's  stand — Old  age  pensions — 
Government  employment  a  reserve — How  Germany  eases  the  struggle 
for  existence — The  citizen  as  an  asset  of  the  state — From  the  cradle 
to  the  grave — Great  clearing  house  of  labor — Effect  of  governmental 
employment — Precedence  given  to  married  men — The  inevitable  nature 
of  the  prevailing  rate  of  wages — Unemployment  funds — Lack  of  sys- 
tem in  the  United  States — The  peculiar  methods  of  the  government 
to  get  enlistments — The  bright  future  of  the  soldier  as  seen  on  the 
lithograph — Why  50,000  men  deserted  in  ten  years — The  German 
army  as  an  educational  institution — The  high  spirit  of  patriotism  in 
Germany — Discipline  as  a  moral  asset — The  government  sees  to  it 
that  the  individual  learns  a  means  of  livelihood — Haphazard  methods 
of  the  United  States — If  the  Declaration  of  Independence  were  written 
to-day,  how  would  it  read? — Absorption  of  wealth  by  owners  of  ma- 
chinery— Women  at  work  in  the  United  States — Startling  facts  of 
child  labor — Hard  conditions  in  the  steel  mills — ^The  right  to  work 
no  more  than  the  right  to  exist — The  Carnegie  and  Rockefeller  bene- 
factions— Their  true  economic  significance — Are  they  a  burden  in- 
stead of  a  blessing? — The  history  of  over  production  of  philanthropy 
in  the  past — Failure  of  attempts  to  obtain  more  than  the  prevailing 
rate  of  wages — Why  $5  a  day  bricklayers  only  make  $11   a  week. 

Bismarck  proclaimed  the  doctrine  of  the  right  to  work  as  an 
integral  part  of  the  policy  of  the  German  state: 

"Give  the  workingman  work  as  long  as  he  is  healthy,  assure 
him  care  when  he  is  sick,  insure  him  maintenance  when  he  is 
old.  Was  not  the  right  to  work  openly  proclaimed  at  the  time 
of  the  publication  of  the  common  law?  Is  it  not  established 
in  all  our  social  arrangements,  that  the  man  who  comes  before 
his  fellow  citizens  and  says,  'I  am  healthy,  I  desire  to  work,  but 
can  find  no  work,'  is  entitled  to  say  also,  'Give  me  work,'  and 
that  the  state  is  bound  to  give  him  work." 

"But  large  public  works  would  be  necessary,"  exclaimed  an 
opponent. 

"Of  course,"  replied  Bismarck.  "Let  them  be  undertaken, 
why  not?     It  is  the  state's  duty." 

The  fundamental  law  supplemented  by  the  Stein-Hardenberg 

293 


294  THE  PRICE  OF  INEFFICIENCY 

legislation  of  the  second  decade  of  the  last  century  was  the 
foundation  on  which  Bismarck  stood,  when  his  policy  was  out- 
lined in  1884.  Carried  out  with  the  full  approval  of  the  old 
Emperor,  and  by  conservative  majorities  in  the  Prussian  legis- 
lature and  the  imperial  parliament,  this  policy  has  had  a  funda- 
mental part  in  the  development  of  unified  Germany.  Social 
insurance,  industrial  pensions,  governmental  regulation  of 
monopolies,  the  bureaucratic  system  in  keeping  politics  out  of 
business  and  business  out  of  politics,  her  educational  system, 
and  the  Bismarckian  policy  towards  labor  have  proved  the 
cornerstones  of  German  progress. 

The  policy  has  not  been  unaccompanied,  however,  with  strong 
opposition,  and  the  various  systems  of  the  intervention  of  the 
state  in  the  relations  of  the  employer  and  employee  are  open 
to  certain  attacks.  The  social  economist  argues  that  state  pro- 
vision of  employment,  pensions,  compulsory  insurance  and  other 
forms  of  state  aid,  are  a  tax  on  the  thrifty  for  the  benefit  of 
the  unfit,  thus  interfering  with  the  working  out  of  the  law  of 
the  survival  of  the  fittest,  and  undermining  thrift  and  economy 
in  all  by  reason  of  the  prospect  of  being  cared  for  by  the  state 
in  old  age  or  sickness. 

The  scheme  thus  tends  to  weaken  the  race  as  a  whole.  Yet 
despite  theories  of  this  kind,  the  working  out  of  the  German 
policies  proceeds  with  generally  good  results.  While  it  may 
be  urged  that  pensions  for  the  aged  encourage  extravagance  in 
the  youth,  yet  such  pensions  serve  to  lift  a  weight  of  anxiety 
from  numberless  lives,  enabling  the  task  in  hand  to  be  per- 
formed with  greater  care  and  skill,  than  if  tinctured  so  much 
with  the  American  anxiety  that  tim;e  is  money. 

While  poverty  is  abundant  in  Germany,  the  violent  contrasts 
of  pauperism  is  not  as  noticeable  as  in  the  United  States  and 
England,  where  the  fear  of  poverty,  the  hope  of  gain,  and  the 
absence  of  any  succor  in  time  of  necessity  save  that  provided 
or  obtained  by  the  worker  himself  are  the  sharp  prods  to  en- 
courage thrift. 

One  of  the  concrete  proofs  of  the  success  of  the  present  Ger- 
man system,  lies  in  the  decrease  of  German  immigration  to  the 
United  States.  It  is  now  only  about  one-tenth  the  figure  of 
former  years. 

The  right  to  work  in  Germany,  the  employment  by  the  gov- 
ernment of  men  who  cannot  find  employment  elsewhere  has 
not  proved  a  social  institution  of  much  currency.    Like  a  gov- 


THE  RIGHT  TO  WORK  295 

ernmental  gold  reserve,  it  remains  unused  but  of  great  potential 
possibilities. 

The  government  has  not  actually  had  to  provide  work  to  any- 
great  extent,  that  is  Notarbeit  (necessity  work),  but  its  readi- 
ness to  do  so  can  always  be  relied  upon. 

Frederic  C.  Howe  in  the  Outlook  of  May,  1910,  in  "How 
Germany  Cares  for  her  Working  People,"  states: 

"Germany  is  not  burdened  with  the  economic  philosophy 
which  America  inherited  from  England.  Germany  does  not 
look  upon  the  state  as  an  unmixed  evil.  Germany  does  not 
apotheosize  the  names  of  Adam  Smith  and  Ricardo;  she  does 
not  believe  in  unlicensed  individualism;  she  does  not  permit 
the  struggle  for  existence  to  weed  out  the  so-called  weak  and  in- 
competent. Germany  recognizes  that  modern  industry  has 
made  those  who  labor,  dependent  upon  other  causes  than  their 
own  thrift  or  willingness  to  work;  they  are  not  incompetent 
and  unfit  because  they  have  no  job.  Germany  has  secured  in- 
dustrial efficiency  'by  the  social  legislation  of  the  state.' 

"From  the  cradle  to  the  grave,  the  state  has  its  finger  on 
the  pulse  of  the  citizen.  His  education,  his  health,  and  his 
working  efficiency  are  all  a  matter  of  constant  concern.  The 
worker  is  carefully  protected  in  his  person  from  accident,  he 
is  trained  in  his  hand  and  his  brain  to  be  a  good  producer,  and 
he  is  insured  against  accident,  sickness  and  old  age.  When 
idle  through  no  fault  of  his  own,  work  is  frequently  found  for 
him.  Wlien  homeless,  a  lodging  is  offered  so  that  he  will  not 
pass  to  the  vagrant  class.  Wlien  sick,  he  is  cared  for  in  won- 
derful convalescent  homes,  tuberculosis  hospitals  and  farm  col- 
onies. When  old  age  removes  him  from  the  mill  or  the  factory, 
a  pension  awaits  him,  a  slight  mark  of  appreciation  from  so- 
ciety, which  has  taken  in  labor  all  that  his  life  had  to  give  and 
left  him  nothing  more  than  a  bare  subsistence  wage.'' 

Germany  provides  a  very  efficient  system  of  finding  work. 
The  municipal  labor  registries  are  a  remarkable  institution 
which  should  be  duplicated  in  America.  ]\Ir.  Howe,  in  the 
same  article,  describes  them: 

"There  are  nearly  400  of  the  labor  registries  in  the  empire. 
They  find  work  for  from  500,000  to  1,000,000  men  and  women 
every  year.  They  are  maintained  partly  by  the  cities,  partly 
by  private  agencies.  They  are  great  clearing-houses  for  skilled 
and  unskilled  labor  of  both  sexes.  I  visited  the  registries  in 
Diisseldorf  and  Berlin.     The  latter  is  one  of  the  largest  and 


296  THE  PRICE  OF  INEFFICIENCY 

best  in  the  Empire.  It  secured  120,000  positions  in  the  year 
1908.  It  was  established  in  1888  and  is  maintained  by  public 
authorities  at  a  cost  of  $25,000  a  year,  and  is  administered  by 
the  Insurance  Department.  It  occupies  a  splendid  four-story 
building,  probably  a  hundred  feet  front,  on  Gormanstrasse. 
It  runs  through  to  another  street,  the  entrance  on  the  latter 
street  being  to  the  women's  department.  In  the  center  of  the 
building  is  a  great  open  hall  capable  of  seating  1,400  persons. 
There  were  probably  600  men  waiting  for  work  when  I  was 
there.  Here  the  men  sit,  grouped  in  sections,  according  to  em- 
ployment. When  a  call  is  received  by  mail  or  over  the  tele- 
phone, the  men  are  called  to  the  desk.  The  wages  and  condi- 
tions are  explained  and  the  men  are  given  a  card  to  the  em- 
ployer. Priority  is  given  to  the  married  men  as  well  as  to 
those  first  registered.  On  one  side  of  the  hall  is  a  buffet  where 
beer,  cigars  and  food  are  sold  at  a  trifling  sum.  There  are 
cobblers  and  tailors  who  do  odd  jobs  of  mending.  A  shower 
bath  can  be  obtained  in  the  basement  for  a  cent.  There  is  a 
smaller  and  more  elaborate  room  for  the  skilled  workers  and 
one  for  women  workers  in  another  portion  of  the  building. 
Connected  with  the  registry  is  a  free  dispensary  and  medical 
inspection  bureau. 

"These  labor  registries,  scattered  all  over  the  Empire,  are 
being  co-ordinated,  so  that  the  surplus  labor  of  one  market  can 
be  shifted  to  another,  while  an  attempt  is  being  made  to  supply 
the  demland  of  the  farmer  for  casual  labor. 

"Voluntary  arbitration  courts  are  usually  found  in  connec- 
tion with  the  registries.  They  are  made  up  of  employers  and 
employees,  and  are  used  for  the  settlement  of  minor  trade  and 
wage  disputes.  With  these  are  free  legal  aid  dispensaries  for 
the  aid  of  the  working  classes. 

"Upwards  of  a  dozen  cities  have  opened  up  free  house  regis- 
tries designed  primarily  for  the  working  classes.  House  or 
apartment  owners  report  to  the  agency,  giving  details  as  to 
location,  rent,  etc.  An  officer  of  the  bureau  then  makes  an  in- 
spection, and,  if  the  house  is  approved,  it  is  placed  on  the  list. 
In  some  towns  the  plan  has  found  much  favor,  so  much  that  all 
other  methods  of  renting  by  advertisement  have  been  aban- 
doned. This  is  a  great  boon  to  the  workman,  employed  as  he 
is  all  day  at  his  job.  It  saves  him  the  time  he  can  ill  afford 
to  lose  and  enables  him  to  find  the  sort  of  lodging  he  desires. 

"None  of  these  agencies  creates  work  where  no  work  exists. 


THE  RIGHT  TO  WORK  297 

Neitber  the  labor  registry  nor  the  Herbergen  will  open  the  door 
of  the  factory'  or  meet  the  emergency  of  industrial  depression. 
They  do  not  create  opportunity;  they  merely  attempt  to  find 
a  hole  for  the  peg,  or  prevent  the  man  from  losing  his  grip  on 
himself  during  a  period  of  waiting.  Nor  do  they  provide  for 
the  mechanic  who  is  brought  face  to  face  with  starvation  for 
himself  and  his  family,  by  reason  of  the  closing  of  the  factory. 

"During  the  recent  industrial  depression  in  America  the  un- 
employed petitioned  the  councils  of  many  of  our  cities  to  open 
up  relief  work.  They  did  not  want  charity;  they  wanted  work. 
But  the  cities  were  powerless  to  relieve  the  situation,  or  had  no 
inclination  to  do  so.  Here,  again,  Germany  recognizes  that  the 
worker  has  a  right  to  work ;  that  he  has  a  right  to  expect  some- 
thing more  than  a  visit  from  the  charity  organization  society. 
'Distress  work'  is  very  generally  provided  by  the  city.  It  is 
usually  limited  to  the  winter  months.  The  cities  disclaim  any 
legal  or  moral  responsibility  in  the  matter.  They  do  not  recog- 
nize the  'right  to  work.'  But  they  provide  work  in  consider- 
able measure,  nevertheless.  They  distribute  ordinary  work  so 
as  to  give  the  maximum  of  relief.  They  also  require  contrac- 
tors to  employ  local  men.  Extraordinary  conditions  are  met 
to  some  extent  by  development  work,  such  as  excavations,  street 
paving,  sewer  construction,  forestry,  wood  chopping  and  the 
like.  Applicants  must  be  residents  of  the  city  and  must  be  heads 
of  families.  It  is  true  that  the  work  done  is  not  of  the  best, 
and  it  is  more  costly  than  that  done  through  the  regular  chan- 
nels, but  it  saves  the  self-respect  of  the  worker  and  to  some  ex- 
tent recognizes  his  right  to  work.  In  a  larger  sense,  it  saves 
the  community  from  the  wreckage  of  vagabonds,  tramps,  and 
semi-criminals  who  are  the  inevitable  wastage  of  every  period 
of  hard  times. 

"These  are  some  of  the  means  employed  to  prevent  waste, 
to  keep  the  producing  power  of  the  nation  at  a  maximum,  and 
to  save  the  worker  himself  from  the  demoralizing  influence  of 
irregular  employment.  They  stop  far  short  of  a  solution  of 
the  industrial  problem.  The  socialists  have  but  little  sympathy 
"\nth  these  palliatives  as  in  any  sense  remedial.  But  from  the 
point  of  view  of  the  individual,  the  plan  is  far  better  than  noth- 
ing, although  as  a  social  programme  it  fails  in  this;  it  does 
nothing  to  create  more  jobs.  And  there  can  be  no  very  great 
improvement  in  the  well-being  of  the  working  classes  until  there 
are  more  jobs  than  men  seeking  them." 


298  THE  PRICE  OF  INEFFICIENCY 

Mr.  Howe  is  undoubtedly  correct  in  his  last  statement. 
There  certainly  can  be  no  very  great  improvement  in  the  well- 
being  of  the  working  classes  until  there  are  more  jobs  than 
those  seeking  them.  Similiarly  with  farmers,  who  must  con- 
tinue their  present  ways  until  there  are  more  farms  than  farm- 
ers seeking  them,  while  millionaires  must  remain  restricted  in 
number  until  there  are  more  millions  lying  about  than  there 
are  seekers  for  the  same. 

Mr.  Howe  does  not  indicate  just  where  the  superfluity  of 
jobs  is  to  come  from.  Certainly  not  from  the  government. 
Nothing  is  to  be  expected  from  "notarbeit"  as  the  government 
pays  less  than  the  prevailing  rate  of  wages,  which  will  not  im- 
prove the  well-being  of  the  working  classes  as  a  whole.  If  bet- 
ter wages  were  paid,  everyone  would  seek  work  with  the  gov- 
ernment. 

The  system  of  state  work,  however,  does  well  in  times  of 
emergency  and  for  individual  cases.  The  rate  of  pay  is  very 
little  lower  than  the  prevailing  wage,  as  at  too  low  a  rate,  ob- 
jection would  be  raised ;  similar  to  the  objections  made  to  convict- 
made  goods  underselling  the  work  of  the  honest  man;  and  it 
would  be  the  objection  of  the  competent  against  the  undue  com- 
petition of  the  incompetent.  Indeed  the  very  narrow  margin 
under  the  prevailing  wage,  shows  how  little  it  is  possible  even 
for  a  government  to  get  away  from  the  law  of  the  survival  of 
the  fittest,  though  actuated  by  the  best  of  intentions.  Those 
loudest  in  proclaiming  the  right  to  work,  raise  the  greatest  out- 
cry when  it  is  given  to  someone  else.  But  Germany  is  aiding 
her  workers  as  far  as  it  is  practicable  to  do  so,  which  is  one  of 
the  secrets  of  her  progress  while  other  nations  are  doing  little 
or  nothing  at  all. 

No  country  has  as  yet  actually  introduced  any  insurance 
against  non-employment,  but  it  is  being  urged  in  England 
where  the  problem  of  the  unemployed  has  been  more  pressing 
for  years  than  in  any  other  country. 

The  Commissioner  of  Labor  in  his  report  states: 

"Provision  for  unemployment  by  voluntary  organizations 
has  followed  the  same  general  course  of  development  as  other 
forms  of  insurance.  With  the  gro^vth  of  the  trade  unions,  it 
was  recognized  at  an  early  date  that  proper  care  of  persons  out 
of  work  would  be  an  efficient  means  of  preventing  such  persons 
from  underbidding  the  prevailing  rates  of  wages  and  thereby 
would  be  an  important  means  of  maintaining  an  existing  level. 


THE  RIGHT  TO  WORK  299 

The  British  trade  unions  in  particular  recognized  the  impor- 
tance of  this  form  of  provision  against  unemployment;  one  hav- 
ing instituted  a  svstem  of  out-of-work  benefits  as  earlv  as  1831, 
and  this  provision  -was  subsequently  adopted  in  otlier  countries, 
so  that  in  all  of  the  countries  treated  in  the  present  study,  such 
relief  was  found  to  a  greater  or  less  extent. 

"The  forms  in  w^hich  unemployment  benefits  are  provided 
consist  of  first,  a  pecuniary  out-of-work  benefit,  usually  granted 
under  many  restrictions;  second,  a  travel  benefit,  enabling  the 
workman  to  reach  localities  where  there  are  opportunities  for 
employment;  and  third,  a  removal  benefit,  permitting  the  work- 
man to  make  a  permanent  change  in  his  place  of  residence. 
Some  of  the  trade  unions,  notably  in  Belgium  and  France,  have 
instituted  workshops  in  which  employment  is  provided  for  un- 
emploj'ed  members. 

"In  some  institutions,  as  for  instance,  the  friendly  societies 
of  Great  Britain,  the  unemployment  benefit  consists  solely  of 
the  remission  of  membership  dues  while  the  member  is  unable 
to  secure  employment. 

"Investigation  of  the  subject  of  workmen's  insurance  has  dis- 
closed a  variety  of  miscellaneous  forms  of  aid  in  case  of  un- 
employment, and  among  these  may  be  mentioned  the  follow- 
ing: 

"Some  of  the  British  and  Belgian  societies  providing  relief 
in  case  of  sickness,  death,  etc.,  grant  their  members  full  rights 
of  membership  without  the  payment  of  dues  during  involun- 
tary unemployment. 

"A  number  of  business  firms,  especially  in  Germany,  have 
created  unemployment  funds  for  the  workmen  employed  in 
their  establishments;  membership  in  these  funds  is  sometimes 
compulsory  and  sometimes  voluntary.  Most  of  these  organiza- 
tions are  rather  systems  of  compulsory  saving  than  systems  of 
insurance  because  most  frequently  the  member  is  entitled  only 
to  the  amounts  paid  in  by  him,  together  with  subsidies  or  vari- 
ous forms  provided  by  the  establishment  or  by  interest  arising 
from  a  special  reserve  fund. 

"In  Italy  a  privately  endowed  organization  known  as  the 
'IJmanitaris'  of  Milan  grants  subsidies  on  the  Ghent  system 
to  labor  unions  and  other  organizations  providing  unemploy- 
ment funds. 

"A  number  of  associations  of  employers  in  Belgium,  France 
and  Germany  have  collected  assessments  based  on  the  number 


300  THE  PRICE  OF  INEFFICIENCY 

of  their  employees  or  on  wages  in  order  to  institute  a  fund  for 
the  relief  of  the  unemployed  workman. 

''One  instance  is  known  of  a  German  establishment  which 
provides  that  when  the  workman  is  dismissed  because  of  lack 
of  work,  he  becomes  entitled  to  full  wages  or  salary  for  a  period 
of  time  based  on  the  length  of  service  in  the  establishment. 

"In  Germany  and  France  a  small  number  of  private  com- 
panies have  undertaken  to  provide  unemployment  insurance  as 
a  business  undertaking.  Although  these  firms  issue  collective 
contracts,  they  cannot  be  properly  classed  as  institutions  of  social 
insurance.  According  to  the  information  available,  they  have 
not  met  with  any  great  measure  of  success." 

In  the  United  States,  neither  the  national,  city  or  state  gov- 
ernments make  any  systematic  efforts  to  relieve  the  unem- 
ployed. Some  cities  have  municipal  lodging  houses,  where  the 
needy  sojourner  may  earn  a  night's  lodging  by  chopping  some 
kindling  wood.  Farm  colonies  appear  in  some  places.  Uncle 
Sam's  efforts  at  the  relief  of  unemployment  are  chiefly  con- 
nected with  providing  places  for  an  army  of  faithful  postmas- 
ters, but  otherwise,  he  is  engaged  in  deflecting  from  the  ranks 
of  industry,  a  large  supply  of  valuable  workers  to  serve  in  the 
army  and  navy. 

The  methods  followed  by  the  government  amount  practically 
to  a  fraud  on  the  man  enlisting  and  the  resentment  which  is 
aroused  is  such  that  desertions  reach  an  unprecedented  number, 
as  will  be  seen. 

Recruits  are  induced  to  enlist  by  means  of  booklets  and 
lithographs  picturing  the  advantages  of  a  military  life.  The 
Baltimore  Sun  reprints  matter  of  this  kind  which  is  typ- 
ical of  what  is  being  used  all  over  the  country  at  recruiting 
stations : 

' '  Uncle  Sam  says : 

"  'Why  shiver  in  Baltimore  when  you  can  spend  the  winter  in 
the  balmy  air  and  delightful  climate  of  the  West  Indies? 

' '  '  Why  feel  hungry  when  you  can  get  three  good,  square  meals 
a  day  from  Uncle  Sam? 

"  'Why  wear  worn  and  ragged  garments  when  Uncle  Sam  will 
give  you  a  complete  outfit  of  clothes  free? 

"  'AVhy  look  for  a  job  in  which  you  have  to  spend  all  your 
earnings  for  board,  lodging,  clothing  and  doctor's  bills,  with 
no  chance  to  have  any  fun  or  save  anything  for  a  'rainy  day'? 

"  'A  good  job  is  looking  for  you.     The  United  States  navy  is 


THE  RIGHT  TO  WORK  301 

looking  for  ambitious  young  men  who  are  anxious  to  see  the 
world  and  earn  advancement. 

"  'Is  it  not  worth  considering?'  " 

The  bright  side  is  further  presented  by  a  well  written  book- 
let, many  of  whose  paragraphs  would  do  justice  to  a  get- rich- 
quick  promoter. 

' '  There  is  a  fascination  about  a  life  that  follows  the  sea,  from 
port  to  port,  from  country  to  country,  from  ocean  to  ocean, 
amid  ever-changing,  ever-shifting  scenes,  as  compared  with  the 
quiet,  stationary,  though  commendable,  life  in  the  factory,  the 
farm  or  the  office. 

"There  is  fascination  about  being  one  of  the  crew  of  a  ship 
of  the  United  States  navy — the  navy  that  carries  the  stars  and 
stripes,  the  navy  that  produced  a  John  Paul  Jones,  a  Lawrence, 
a  Decatur,  a  Perry,  a  Farragut,  a  Porter  and  a  Dewey,  the 
navy  that  gave  birth  to  such  expressions  as,  'I  have  only  begun 
to  fight,'  'Don't  give  up  the  ship,'  'We  have  met  the  enemy 
and  they  are  ours,'  'Damn  the  torpedoes,  go  ahead,'  'You 
may  fire  when  you  are  ready,  Gridley,' — expressions  that  will 
live  in  the  minds  of  men  forever. ' ' 

These  are  only  a  few  of  the  arguments  set  forth.  It  is  ob- 
vious, however,  that  many  of  the  arguments  would  not  do 
except  for  cold  weather.  With  a  change  of  season,  the  recruit- 
ing offices  doubtless  provide  themselves  with  slightly  different 
literature. 

Not  long  since  a  cruise  was  made  up  the  Hudson  with  the 
result  that  many  country  boys,  who  are  most  easily  fascinated 
by  a  life  they  know  nothing  about,  were  enlisted.  The  result 
of  this  foray  was  that  a  great  scarcity  of  farm  hands  was  ex- 
perienced the  following  season  throughout  the  region. 

The  same  policy  of  using  vivid  colors  to  attract  the  recruit 
is  followed  for  the  army  as  well  as  for  the  navy,  and  in  cities 
the  recruiting  officers,  in  spick  and  span  uniforms,  station  them- 
selves in  public  squares,  like  Salvation  Army  chaps,  where  there 
is  a  considerable  floating  population,  and  there  exercise  their 
handsomeness  and  talents  in  getting  men  into  the  army. 

The  results  of  this  system  of  misrepresentation  as  to  the  real 
life  of  the  soldier  are  forcibly  summarized  by  Bailey  Millard 
in  "The  Shame  of  Our  Army"  in  the  Cosmopolitan  Magazine 
of  September,  1910: 

"From  the  year  1900,  according  to  the  actual  figures  and 
estimates  of  officers  in  the  War  Department,  up  to  the  end  of 


302  THE  PRICE  OF  INEFFICIENCY 

the  fiscal  year  ended  June  30,  1910,  there  deserted  from  our 
new  army  a  total  of  50,000  men.  This  is  allowing  only  4,000 
desertions  for  the  past  fiscal  year,  no  report  of  which  will  be 
made  until  October,  while  the  indications  as  prefigured  by  the 
number  of  courts  martial  for  desertion,  are  that  the  total  will 
be  as  large  if  not  larger  than  for  1909.  Think  of  it!  Over 
fifty  thousand  deserters!  The  record  would  be  ludicrous  if  it 
were  not  so  tragic. 

''Do  we  gain  any  consolation  by  looking  further  into  the 
figures  for  1909?  Not  an  atom.  For  example,  take  the  Sixth 
Infantry.  From  the  regiment  142  men  deserted,  or  12.9%  of 
the  whole  number.  Then  there  was  the  Eighth  Cavalry,  with 
12.7%  desertions  and  the  Fourth  Field  Artillery,  with  10.4%. 
Blackest  of  all  the  records  among  individual  troops  and  com- 
panies was  that  of  Company  K  of  the  Twenty-eighth  Infantry, 
located  at  Fort  Snelling,  Minnesota.  Of  the  men  in  this  com- 
pany, nearly  one-third  became  disgusted  with  the  service  and 
fared  forth  to  seek  other  fields  of  usefulness. 

"Here  are  four  other  companies  that  had  high  percentages 
of  desertions  last  year.  Company  M,  Sixth  Infantry,  20.2%; 
Battery  B,  Fourth  Field  Artillery,  18.4%;  Troop  B,  Eighth 
Cavalry,  17.9%,  and  Battery  E,  First  Field  Artillery,  17.6%. 

"Other  posts  at  which  there  were  high  percentages  of  deser- 
tions last  year  were  Fort  Duchesne,  Utah,  15.8%;  Fort  Yellow- 
stone, "Wyoming,  15.8%;  Fort  Robinson,  Nebraska,  15.6%; 
Fort  Columbia,  Washington,  15.4%. 

"It  is  in  the  dog  days  that  most  men  desert.  Over  23%  of 
last  year's  desertions  occurred  in  July  and  August.  A  hot 
hike  over  a  dusty  road  on  a  practice  march  in  which  the  valiant 
private  sees  no  sense  or  reason,  a  ditch  to  be  dug  under  the 
blazing  summer  sun,  an  acre  of  brush  to  be  grubbed  out,  or  a 
close,  smelly  stable  to  be  cleaned  by  the  sweat  of  the  cavalry- 
man's brow,  and  there  is  an  end  to  the  dream  of  military  glory. 

"It  is  a  shock  to  most  young  Americans  who  have  enlisted  in 
the  army  to  taste  the  delights  of  military  life  to  find  that  the 
most  important  part  of  their  training,  from  the  viewpoint  of 
the  post  commander,  is  to  dig  ditches,  M^ash  pots  and  pans,  wait 
on  table,  clean  out  stables,  sweep  off  walks,  or  cut  brush  in  the 
hot  sun.  Those  were  the  conditions  the  deserters  from  the 
posts  just  mentioned  found  in  the  army.  Soon  they  began  to 
loathe  the  life.  It  sickened  their  souls,  it  humbled  their  pride 
and  they  ran  away  from  the  service. 


THE  RIGHT  TO  WORK  303 

"Of  all  the  compauies  of  white  soldiers  in  these  United 
States  and  their  dependencies  in  1909,  there  were  only  five 
from  which  there  were  no  desertions." 

The  experience  of  the  American  enlisted  man  is  in  strong 
contrast  to  the  German  army  conditions.  As  all  able-bodied 
men  must  serve  in  the  army  in  Germany,  the  government  has 
to  adopt  no  undignified  schemes  to  get  enlistments,  and  the 
entire  point  of  view  is  different.  Although  formerly  in  the  70 's 
and  80 's,  there  were  numerous  desertions  and  conditions  were 
harsh,  this  is  no  longer  the  case.  The  array  is  managed  in  the 
same  thorough  and  efficient  manner  as  other  industrial  and 
educational   undertakings. 

In  the  first  place,  service  in  the  army,  although  compulsory 
for  rich  and  poor  alike,  is  not  regarded  any  longer  as  an  irk- 
some thing.  The  service  is  an  expression  of  patriotism,  a  duty 
discharged  to  the  state,  second  only  to  the  duties  owed  to  one's 
parents.  This  point  of  view  changes  the  entire  situation  and 
while  service  in  the  army  is  not  a  pastime  by  any  means,  it  is 
a  healthy  and  wholesome  experience,  and  there  are  few  Ger- 
mans who  do  not  look  back  on  their  time  of  service  with  pleas- 
urable recollections. 

In  addition  it  is  a  moral  and  educational  training,  instilling 
patriotism  and  respect  for  the  state  and  authority.  The  dis- 
cipline received  is  one  of  the  soldier's  best  assets  in  later  life 
and  though  misinformed  economists  cry  out  against  the  vast 
cost  of  the  army,  it  is  only  in  a  small  degree,  if  at  all,  a  social 
waste. 

After  the  common  school  course  in  Germany,  it  is  compulsory 
for  the  worker  to  attend  the  continuation  school  part  of  the  day 
or  evening,  until  the  age  of  eighteen  is  reached,  during  and 
after  which  time  a  trade  must  be  learned.  The  two  or  three 
years'  military  service  occurs  usually  from  the  latter  half  of 
the  twenty-first  year  until  the  age  of  twenty-four  is  reached, 
but  it  is  optional  to  begin  at  18,  or  in  the  case  of  one  taking 
a  college  course  which  might  be  interrupted  to  postpone  the 
one  year  of  military  service  imposed  on  those  taking  higher 
courses  of  education,  until  26. 

A  system  thus  which  sees  to  it  that  the  young  man  is  prop- 
erly equipped  with  a  vocation  and  whose  service  in  the  army, 
too,  adds  elements  of  discipline  and  of  moral  and  patriotic 
force  to  his  make-up,  is  certainly  superior  to  the  haphazard 
system  of  the  United  States  where  no  one  is  compelled  to  learn 


304  THE  PRICE  OF  INEFFICIENCY 

any  vocation,  where  the  conditions  are  such  that  the  learning 
of  a  trade  is  made  very  difficult  and  where  the  needs  of  the 
army  are  filled  by  enticing  young  men  into  enlisting  in  a  serv- 
ice from  which  so  large  a  proportion  desert,  to  remain  fugi- 
tives from  justice  thereafter,  without  trades  or  any  settled 
means  of  a  livelihood. 

"Whenever  conditions  such  as  now  exist  in  the  army  are  seen 
on  such  a  scale  and  over  such  periods  of  time,  they  become  an 
indictment  of  the  system.  The  deserters  are  not  to  blame,  they 
are  the  victims  of  the  system,  the  false  and  aristocratic  organi- 
zation of  the  whole  army.  The  trouble  begins  at  West  Point 
where  a  certain  class  of  young  men  are  educated  in  military 
matters  in  such  a  manner  as  to  transform  them  into  snobs. 
They  then  become  officers  and  the  enlistment  under  their  com- 
mand have  little  or  no  opportunities  of  rising  to  such  heights. 
A  line  of  demarkation  thus  exists  between  the  officer  and  the 
private.  They  are  not  comrades,  but  the  officer  considers  him- 
self a  superior  species  and  regards  the  enlisted  man  as  a  mere 
convenience  or  body  servant.  This  is  quite  out  of  accord  with 
the  temper  of  a  democratic  country  and  is  the  basic  reason 
why  there  are  so  many  desertions. 

The  system  should  be  overhauled.  "West  Point  should  either 
be  abolished,  or  admission  to  it  gained  only  after  service  in  the 
ranks  consequent  upon  an  ordinary  enlistment,  and  gained  by 
competitive  examination,  free  to  all  enlisted  men  and  free 
from  all  political  influence.  The  heads  of  the  army  should 
come  up  through  the  army,  and  not  be  saddled  on  it  by  an 
aristocratic  method  as  at  present.  While  it  is  now  possible  for 
an  enlisted  man  to  become  an  officer,  he  labors  under  a  stigma 
of  having  come  up  through  the  ranks  instead  of  from  West  Point. 
This  should  be  entirely  removed.  Until  it  is,  conditions  in  the 
army  will  not  improve. 

While  military  service  to  the  extent  required  by  Germany  is 
unnecessary  in  the  United  States,  a  six  months'  course,  or  even 
ninety  days  in  the  army  for  every  citizen,  would  be  a  distinct 
benefit  for  all  concerned. 

In  Germany,  it  is  regarded  as  the  duty  of  the  state  to  see 
that  the  worker  is  competent  in  some  line  of  work,  and  then 
to  utilize  every  facility  to  protect  him  against  non-employment 
and  to  aid  him  in  sickness  and  age.  That  the  right  to  work  is 
becoming  more  and  more  a  right  of  mankind,  of  a  nature  sim- 


THE  RIGHT  TO  WORK  305 

ilar  to  the  rights  struggled  for  aiid  gained  by  earlier  genera- 
tions, is  coming  to  be  more  and  more  recognized. 

Speaking  at  the  municipal  Fourth  of  July  Celebration  in 
Faneuil  Hall  in  Boston,  1911,  Dr.  Charles  W.  Eliot,  president 
emeritus  of  Harvard,  one  of  the  most  noted  of  American  think- 
ers, declared  that  if  the  Declaration  of  Independence  were  to  be 
drawn  up  by  the  American  masses  in  1911,  it  would  be  a  totally 
different  document  from  that  of  our  forefathers,  which  declared 
all  men  were  created  free  and  equal,  an  assertion  to  wliich  he 
gave  the  lie. 

The  new  declaration,  Dr.  Eliot  said,  would  contain  provisions 
like  the  following: 

1.  The  national  resources  of  this  country-,  including  the  pub- 
lic health,  are  not  to  be  sacrificed  to  secure  immediate  profits 
to  a  few  individuals  or  corporations  to-day. 

2.  More  money  should  be  spent  on  public  education,  so  that 
new  generations  may  become  quick  to  deduce  error. 

3.  Every  citizen  in  a  free  state  has  an  inalienable  right  to 
that  amount  of  employment  which  will  yield  for  him  and  his 
family  a  decent  livelihood. 

4.  Every  worker  has  a  right  to  be  insured  against  personal 
losses  due  to  acute  sieloiess,  injuries  and  old  age. 

5.  Every  man  has  a  right  to  the  normal  pleasures  and  em- 
ployments of  life  and  the  leisure  to  enjoy  them. 

6.  Land  and  all  instruments  of  production  and  distribution 
of  products  should  belong  to  society  as  a  whole. 

7.  Every  journeyman  in  one  and  the  same  trade,  should  re- 
ceive the  same  w'ages.  The  hours  of  labor  during  a  day  should 
be  the  same  in  all  occupations. 

8.  ^Methods  of  neighborhood  buying  and  selling  similar  to 
those  now  successful  in  Denmark  should  be  put  into  practice. 

Dr.  Eliot  reasoned  that  a  new  declaration  of  independence 
M'ould  be  appropriate  in  1911,  remarking: 

"Is  it  not  interesting  to  obsei'%'e  that  many  of  the  complaints 
made  against  King  George  III  may  still  be  made  a^rainst  the 
democratic  government  which  succeeded  that  of  the  King." 

Making  comparisons,  he  continued: 

"The  spoils  system  creates  a  multitude  of  unnecessary  offices, 
just  as  the  King  did. 

"Tariff  legislation  has  the  same  effect  as  come  of  the  King's 
arbitrary  measures  to  cut  off  much  trade  with  the  rest  of  the 
world. 


806  THE  PRICE  OF  INEFFICIENCY 

"Unjust  methods  of  taxation  still  prevail,  and  still  intrenched 
abuses  call  for  the  exercise  by  the  people  of  much  patient  suf- 
ferance. ' ' 

Dr.  Eliot  voices  a  deep  conviction,  widely  felt  to-day,  but 
while  the  efficiency  of  the  government  and  its  proper  organiza- 
tion would  go  a  long  way  towards  the  results  desired,  it  may 
be  noted  that  the  right  to  work  is  an  economic  right  and  not  a 
right  of  principle.  Freedom,  equality  before  the  law  and  other 
natural  rights  involve  no  expense  in  themselves.  "When  Dr. 
Eliot  says  that  in  a  free  state,  every  citizen  should  have  an  in- 
alienable right  to  that  amount  of  employment  which  will  yield 
for  him  and  his  family  a  decent  livelihood,  he  merely  paints  a 
desirable  condition  without  stating  a  principle.  He  does  not 
say  who  is  to  supply  the  amount  of  work  needed,  as  Mr.  Howe, 
before  quoted,  failed  to  state  where  the  superfluity  of  jobs  was 
to  come  from.  Under  the  conditions  depicted  by  Dr.  Eliot, 
population  would  increase  so  rapidly  that  the  inalienable  right 
of  employment  and  a  decent  livelihood  would  soon  become  im- 
possible. 

The  right  to  work  is  a  short  and  vigorous  phrase.  What  it 
really  means  is  that  every  man  should  have  an  equal  share  of 
work. 

The  absorption  of  wealth  by  the  owners  of  machinery,  or 
other  means  of  production,  has  to-day  a  powerful  influence  in 
creating  hard  conditions  for  the  worker,  but  taken  with  this, 
the  standard  of  living  is  higher  than  in  former  generations,  and 
the  effort  to  maintain  the  standard  of  living,  of  the  workman 
to  maintain  a  democratic  level  or  at  least  the  semblance  of 
equality  as  in  former  times  when  the  population  was  less  nu- 
merous and  distribution  more  nearly  equal,  and  not  to  sink 
into  a  definitely  lower  scale,  taken  with  the  competition  of  a 
rapidly  increasing  population,  has  produced  the  conditions 
which  give  rise  to  the  assertion  of  the  right  to  work.  Such  a 
right  is  gradually  losing  ground.  Conditions  for  the  worker 
are  growing  harder  all  the  time,  as  may  be  seen  from  the  sta- 
tistics of  the  labor  of  women  and  children. 

The  governmental  report,  "Statistics  of  "Women  at  Work," 
gives  the  following  data: 

"At  the  twelfth  census,  taken  in  the  year  1900,  the  number 
of  women  in  continental  United  States  16  years  of  age  and  over 
reported  as  bread  winners,  or  as  engaged  in  gainful  occupations, 
was  4,833,630.     The  total  number  of  women  16  years  of  age  and 


THE  RIGHT  TO  WORK  307 

over  was  23,485,559.  The  proportion  of  bread  w-inners,  there- 
fore, among  women  of  that  age  was  20.6%,  or  approximately 
one  in  five." 

Regarding  race  and  nativity,  the  report  states  that  of  the 
female  wage  earners,  there  are  1,771,966  native  white  "s^dth 
both  parents  native;  1,090,774  native  white  with  one  or  both 
parents  foreign;  840,011  foreign-born  white;  1,119,621  negroes, 
and  72,947  Indians  and  Mongolians. 

According  to  the  report,  the  total  number  of  children  10  to 
15  for  whom  an  occupation  was  reported  by  the  census  enumer- 
ation in  1900  was  1,752,187.  The  report  states  further,  that 
it  is  certain  that  there  are  a  considerable  number  of  children 
under  10  j^ears  of  age,  who  are  earning  money  regularly  by 
labor.  There  are  142,105  wage  earners  10  years  of  age.  Of 
the  total  number  of  child  bread  winners,  72.2%  were  boys  and 
27.8%  were  girls,  rather  more  than  one-fourth.  Regarding 
race  and  nativity,  there  are  837,402  native  white  with  both 
parents  native;  293,210  native  white  with  one  or  both  parents 
foreign  born;  97,944  foreign-born  white;  516,172  negroes,  and 
5,348  Indians  and  IMongolians.  As  there  were  5,532,495  chil- 
dren 10  to  15  years  of  age  the  proportion  of  child  bread  winners 
therefore  was  approximately  one  in  three. 

This  high  proportion  is  even  more  disturbing  than  the  pro- 
portion of  women  wage  earners.  Dr.  Felix  Adler  well  voices 
the  protest  which  is  being  aroused  when  he  says: 

"I  for  one  am  startled  by  the  fact  that  child  labor  exists  at 
all  in  the  United  States.  No  doubt  it  exists  also  in  other  coun- 
tries, but  one  would  have  inferred,  in  view  of  the  temper  of  the 
American  people,  of  their  generosity,  their  love  for  children 
and  their  well-known  benevolence,  that  it  could  not  take  root 
in  this  country.  Why  does  it  exist  among  a  free  and  noble- 
spirited  people?  Why  is  it  necessary  that  there  should  be 
State  child  labor  committees  and  a  National  Child  Labor  Com- 
mittee?" 

The  figures  given  above  for  child  labor  are  now  much  exceeded 
and  it  is  estimated  that  children  to  the  number  of  2,500,000  are 
now  compelled  to  work. 

The  Wagner-Smith  Commission  of  the  State  of  New  York 
found  that  children  of  even  only  4  or  5  years  of  age  were  at  work 
in  canning  factories  in  the  state. 

Women  at  work  are  often  confronted  with  conditions  inimicable 
to  their  welfare.     In  the  large  department  stores  and  garment 


308  THE  PRICE  OF  INEFFICIENCY 

manufactures  wages  are  so  low  for  many  employees,  particularly 
young  girls,  that  other  means  must  be  resorted  to,  to  eke  out 
an  existence.  The  noticeable  overdressing  of  the  female  relatives 
of  the  proprietors  of  such  establishments  provides  a  further  in- 
centive to  the  girl  on  starvation  wages  to  drift  into  an  easier  life. 
The  real  betrayer  of  the  working  girl  is  the  employer  who  profits 
by  the  low  wages  paid  and  thus  creates  the  conditions  which  lead 
to  her  downfall. 

In  addition  to  the  question  of  the  work  of  women  and  chil- 
dren, who  should  be  as  classes,  free  from  the  necessity  of  wage 
earning,  and  in  addition  to  the  low  wages,  harsh  conditions  of 
work  exist. 

Examples  of  this  are  seen  in  the  steel  industry,  a  highly  or- 
ganized business,  boasted  as  the  creator  of  a  thousand  million- 
aires of  the  three  thousand  in  the  United  States. 

The  Bethlehem  Steel  Company  where  labor  conditions  were 
investigated  by  the  Department  of  Commerce  and  Labor,  an 
investigation  which  was  confirmed  by  the  Social  Service  Com- 
mission of  the  Federal  Council  of  the  Churches  of  Christ  in 
America,  found  conditions  justifying  severe  censure.  Con- 
cerning the  hours  of  labor  the  report  says: 

"Just  before  the  strike,  4,725  men,  or  51%  of  all  the  em- 
ployees, worked  12  hours  a  day;  220  workmen  had  a  twelve- 
hour  day  excepting  on  Saturdays,  when  their  hours  were  either 
ten  or  eleven;  4,203  employees  had  a  work  day  of  ten  and  a 
half  to  eleven  hours  in  length,  generally  with  a  half  day  off 
on  Saturday,  and  47  worked  on  other  schedules  not  speci- 
fied. 

"Beyond,  and  intensifying  the  evils  of  a  twelve-hour  day, 
was  the  existence  in  many  departments  of  a  seven-day  week. 
Twenty-eight  per  cent,  of  all  employees  worked  regularly  seven 
days  in  the  week,  but  in  addition  were  those  who  worked  on 
Sundays  as  overtime,  regularly.  While  it  is  claimed  by  the 
management  that  Sunday  and  overtime  work  is,  in  some  de- 
partments at  least,  optional  with  the  men,  it  is  nevertheless 
true  that  foremen  and  gang  bosses  have  compelled  men  to 
work  on  Sunday  against  their  protest  and  upon  pain  of  dis- 
charge. 

"Wages,"  the  committee  says,  "average  less  than  18  cents 
an  hour  for  61  %  of  the  9,184  employees,  or  $2.16  for  a  twelve- 
hour  day.  Of  the  balance,  31.9%  earned  less  than  14  cents  an 
hour,  or  less  than  $1.68  for  a  twelve-hour  day." 


THE  RIGHT  TO  WORK  309 

Similar  conditions  exist  in  other  steel  plants.  Tn  the  Amer- 
ican Magazine,  in  an  article  "Old  Age  at  Forty,"  John  H.  Fitch 
describes  conditions  in  the  United  States  Steel  Co.  in  Pitt.sbnrgh. 

"After  nearly  a  year  spent  among-  the  Pittsburgh  steel  work- 
ers in  1907  and  1908,  three  phases  of  the  labor  policies  of  the 
steel  companies  stand  out  in  my  mind  as  overshadowing  all 
others;  they  are  the  factors  that  enter  most  deeply  into  the  lives 
of  the  men:  A  daily  and  weekly  schedule  of  hours,  both  shock- 
ingly long;  a  system  of  speeding  that  adds  overstrain  to  over- 
time, and  crowning  all,  a  system  of  repression  that  stifles  initia- 
tive and  destroys  healthy  citizenship. 

"To-day  a  large  majority  of  the  steel  workers  in  Allegheny 
county  work  twelve  hours  out  of  each  twenty-four.  There  are 
men  classed  as  day  laborers,  and  some  molders  and  machinists 
w^ho  have  a  theoretical  ten-hour  day.  But  when  the  mills  are 
busy  these  men  work  twelve  hours  and  longer.  The  machinists 
work  on  repairs  when  there  is  a  break-down,  and  quit  when  the 
repairing  is  finished.  Twenty-four  hours  on  a  job  is  no  un- 
common thing.  I  talked  with  a  machinist  one  day  who  had 
worked  thirty-six  hours  consecutively  the  week  before. 

"Can  you  conceive  of  what  it  means  to  work  twelve  hours  a 
day  seven  days  in  the  week?  Twelve  hours  every  day  spent 
within  the  mills  means  thirteen  to  fourteen  hours  away  from 
home,  for  the  skilled  men  often  live  half  an  hour's  ride  from 
the  mills.  It  means  early  hours  for  the  wife,  if  breakfast  is 
to  be  on  time,  and  late  hours  too,  if  the  supper  dishes  are  to 
be  washed.  It  doesn't  leave  much  time  for  family  life,  either, 
when  the  husband  begins  to  doze  over  his  paper  before  the 
evening's  work  in  the  kitchen  is  done,  and  when  necessity  inev- 
itably drives  him  to  bed  early,  so  that  he  may  get  up  in  time 
for  the  next  day's  routine." 

Carnegie,  the  philanthropist  and  advocate  of  peace,  cuts  a  not- 
able figure  in  the  history  of  our  generation.  But  it  was  from 
conditions  such  as  these  that  he  drew  his  wealth.  As  an  iron 
master,  his  hand  w^as  the  hand  of  the  iron  master  indeed,  but  to- 
day he  broadly  distributes  the  bounty  w^hich  he  ground  from 
working  men  and  the  fathers  and  sons  of  working  men.  He  and 
Rockefeller,  a  rival  in  benefactions,  whose  wealth  was  chiefly  de- 
rived through  ruining  his  competitors  by  unfair  methods  rather 
than  by  direct  oppression  of  labor,  give  with  a  lavishness  never 
before  known.  A  recent  table  of  their  benefactions  is  as  fol- 
lows: 


310  THE  PRICE  OF  INEFFICIENCY 

» 

CARNEGIE  GIFTS 

Libraries    $  52,000,000 

Pension    funds    15,000,000 

Carnegie   Institute,   Pittsburgh    16,000,000 

Carnegie   Institute,   Washington    25,000,000 

Peace    Foundation     10,000,000 

Scotch  universities    10,000,000 

Hero    funds     9,000,000 

Carnegie   Steel   Co.   employees    5,000,000 

Dunfermline    Endowment    5,000,000 

Peace  Temple,  the  Hague   1,750,000 

Polytechnic  School,  Pittsburgh    2,000,000 

Allied    Engineers    societies    1,300,000 

Bureau  of  American  Republics    750,000 

Small   colleges   in  U.   S 20,000,000 

County  of   Cambria,   Pennsylvania 600,000 

To  fight  the  hook  worm   1,000,000 

King   Edward's    Hospital,    London 500,000 

Miscellaneous    in   tlie   United   States 18,000,000 

Tradesmen's    associations     400,000 

Miscellaneous  in  Europe    2,500,000 

Carnegie  Corporation  of  N.  Y 25,000,000 

Total     $220,800,000 

ROCKEFELLER  GIFTS 

General    Education    Fund     $  53,000,000 

University    of    Chicago    2S',309,000 

Institute   of   INIedical   Research    8,240,000 

Rush   Medical    College    6,000,000 

Baptist    churches     3,262,000 

Baptist    missions     (foreign)      2,300,000 

Missions     ( local )      2,300,000 

Y.  M.   C.   A 3,500,000 

Barnard    College     1,375,000 

Yale    University    1,300,000 

Harvard   University    1,000,000 

Southern   Education   Fund    1,125,000 

Union  Theological  Seminary    1,000,000 

Baptist  Education  Society    1,000,000 

To  fight  hook  worm    1,000,000 

Small  colleges  in  United  States    23,000,000 

City  of  Cleveland    3,000,000 

Hospitals  and  medical  colleges    15,000,000 

Juvenile    reformatories     2,000,000 

Miscellaneous    20,000,000 

Total     $174,711,000 

Carnegie's  gifts    $220,800,000 

Rockefeller's    gifts     174,711,000 

Carnegie's   lead  in  benefactions    $  46,089,000 


THE  RIGHT  TO  WORK  311 

"What  these  enormous  gifts  really  mean,  whether  they  are  a 
burden  or  a  blessing  remains  to  be  seen.  To  produce  the  interest 
on  this  amount  of  capital,  the  whole  efforts  of  not  less  tlian 
200,000  men  must  continually  be  consumed,  allowing  the  annual 
earnings  of  a  man  to  be  one  hundred  dollars  in  excess  of  his 
expenses,  giving  him  a  value  equivalent  to  about  $1,700  of  cap- 
ital at  6%,  the  governmental  estimate  of  the  value  of  a  workman. 

The  Carnegie  and  Rockefeller  benefactions  amount  to  vast 
economic  machines  for  directing  indefinitely  the  labor  of  200,- 
000  men  from  their  ordinary  channels  to  the  purposes  which 
the  benefactors  select.  AVhether  in  the  end  this  is  a  condition 
which  is  desirable  is  an  open  question.  If  all  men  of  great 
wealth  for  the  next  few  generations  did  likewise,  a  time  would 
come  when  the  burden  of  colleges,  libraries  and  various  founda- 
tions would  be  insupportable.  In  the  middle  ages,  the  religious 
orders  became  so  burdensome  through  the  benefactions  accorded 
them,  that  they  were  dissolved  by  governments.  Even  to-day 
France  has  seized  the  property  of  the  Roman  Catholic  Church 
and  similar  seizures  have  been  made  in  Germany,  Spain  and 
Portugal.  Too  much  philanthropy  is  thus  seen  to  be  far  from 
desirable. 

The  withdrawal  from  its  natural  channels  of  business  of  such 
great  sums  of  money  and  its  devotion  to  education  which  is  to 
a  large  extent  unproductive,  may  be  included  among  the  present 
causes  of  depression.  Working  men  are  crushed  under  the  domi- 
nation of  great  industries  that  funds  may  be  provided  for  these 
benefactions,  and  the  right  to  work  often  becomes  no  more  than 
the  right  to  exist. 

While  the  "Ironmaster"  would  not  have  derived  from  the 
founding  of  an  insurance  fund  for  the  workmen  from  whom  he 
drew  his  wealth  the  amount  of  advertising  he  has  from  the  found- 
ing of  libraries  or  the  display  of  his  name  cut  in  the  stone  or  on 
the  brass  tablets  of  so  many  building  fronts,  he  would  have  acted 
with  more  justice  and  the  thought  would  not  spring  so  readily  in 
the  minds  of  the  passersby  that  the  stone  and  the  brass  should 
read,  instead  of  their  present  inscriptions,  ''Carnegie  Restitu- 
tion." 

It  may  be  urged  that  conditions  among  workers  generally, 
especially  among  the  unionized  trades,  are  not  as  bad,  but  even 
in  these  fields  where  the  workman  has  succeeded  in  organizing 
branches  of  it  thoroughly,  the  results  are  not  of  a  very  encour- 
aging nature. 


312  THE  PEICE  OF  INEFFICIENCY 

The  situation  is  shown  by  an  editorial  in  the  New  York 
Times: 

"Mr.  Thomas  Scully,  the  general  organizer  of  the  Inter- 
national Plasterers'  Union,  made  a  frank  admission  as  to  the 
relations  between  wages  and  earnings  in  the  trade  he  represents, 
which  is  extremely  instructive.  'Our  men  are  going  to  win,* 
he  said.  'They  receive,  it  is  true,  $5.50  a  day  for  eight  hours, 
but  their  average  for  fifty-two  weeks  is  not  more  than  $11  a 
week. ' 

''From  the  point  of  view  of  the  working  man  who  considers 
only  his  immediate  interests,  it  may  be  just  as  well  to  earn  $11 
per  w^eek  on  a  scale  of  $5.50  for  an  eight-hour  day,  as  to  earn 
this  much  by  work  covering  more  hours  on  a  lower  scale.  But 
there  is  another  point  of  view  which  the  wage  earner  cannot 
refuse  to  take,  without  putting  in  jeopardy  his  interests  as  a 
citizen,  a  consumer,  a  payer  of  rent,  and  a  participant  in  gen- 
eral prosperity.  It  may  be  assumed  that  $11  a  week  is  not  all 
the  ambitious  plasterer  cares  to  earn  or  has  use  for.  Obviously, 
however,  it  is  all  he  can  earn  under  a  scale  of  wages  which  can 
be  sustained  only  by  restricting  his  average  earnings  to  the 
amount  named. 

"He  must  be  more  or  less  continuously  on  strike,  and  by  re- 
ducing his  output  of  w^ork  to  the  least  amount  consistent  with 
his  views  of  what  he  should  earn  in  the  time  devoted  to  work,  he 
restricts  building  operations,  discourages  the  improvement  of 
real  estate,  makes  dw^ellings  scarcer  and  rents  higher,  so  that  his 
$11  a  M^eek  is  not  worth  as  much  to  him  as  it  would  be  if  won 
under  conditions  less  destructive  of  the  general  good. 

"To  the  average  mechanic  it  might  seem  like  a  paradox  to 
say  that  at  lower  wages  he  could  probably  materially  increase 
his  earnings,  and  that  if  liberal  earnings  are  his  objective,  the 
way  to  reach  them  is  to  fix  the  wage  scale  at  a  practical  figure, 
and  give  up  striking  and  contention.  However,  this  is  the 
truth,  and  it  may  be  that  by  reflection  he  will  come  to  a  realiza- 
tion of  it." 

From  this  it  will  be  seen  that  the  plasterer,  though  his  wages 
are  high  while  he  works,  does  not  earn  as  much  as  the  steel 
worker  in  a  given  year.  All  his  unionism  brings  him  is  the 
privilege  of  loafing  and  paying  higher  rent.  The  union  is  thus 
an  agency  of  inefficiency. 

While  the  rise  of  the  contractor  to  a  position  of  wealth  is  pre- 
vented, since  the  contractor  cannot  make   a  profit  out  of  his 


THE  RIGHT  TO  WORK  313 

labor,  he  has  not  in  reality  benefited  anyone  thereby,  not  even 
himself. 

The  difficulty  of  the  worker  getting  a  larger  proportion  of 
profits  for  his  Avork  than  arises  out  of  natural  causes — the  rela- 
tive supply  of  labor  and  capital — is  thus  seen  to  be  insurmount- 
able, and  the  right  to  work  is  not  a  right  that  is  inalienable. 
Temporary  expedients  will  not  do.  A  thorough  and  systematic 
reorganization  of  the  relations  of  labor  and  capital,  a  new  fair- 
ness on  both  sides,  cooperation,  different  educational  systems 
and  an  efficient  governmental  policy  must  gain  for  the  worker 
a  fairer  share  than  he  can  get  under  present  haphazard  methods. 


CHAPTER  XX 
SOCIAL  INSURANCE 

Marvelous  growth  of  insurance — An  unknown  force  a  few  generations  ago 
— Compulsory  insurance  in  Germany — The  six  forms  of  social  insur- 
ance— The  frightful  waste  of  accident  liability  in  the  United  States — 
What  compulsory  insurance  costs  the  Krupp  Company — Germany's 
program  of  human  salvage — Important  provisions  of  German  insur- 
ance laws — What  the  widow  receives — Shares  of  other  beneficiaries — 
No  lump  sums  as  premiums  for  litigation — Maternity  insvirance — The 
wolf  at  the  German  door — Ethical  effect  of  old  age  insurance. 

The  world  has  progressed  far  in  the  last  century,  and  its 
progress  is  nowhere  so  strikingly  shown  as  in  the  extension  of 
insurance.  One  hundred  years  ago  insurance  was  looked  on 
as  of  a  sacrilegious  nature,  and  .it  was  a  bold  and  forward  per- 
son who  would  attempt  to  thwart  the  designs  of  Providence  in 
such  a  manner. 

To-day  insurance  is  one  of  the  largest  factors  in  the  social 
organization,  and  its  development  in  the  hands  of  private  com- 
panies has  been  so  phenomenal  that  it  is  coming  to  be  regarded 
as  more  properly  a  governmental  function. 

Though  accompanied  by  violent  and  complicated  discussion, 
the  governments  of  Europe  following  the  lead  of  Germany,  are 
steadily  adopting  compulsory  state  insurance  in  various  forms, 
supplementing  and  enlarging  the  work  of  various  mutual  bene- 
fit associations. 

Though  the  governmental  participation  has  undoubtedly 
stimulated  the  development  of  all  the  activities  of  mutual  bene- 
fit societies,  particular^  in  the  matter  of  sick  insurance,  the 
providing  of  this  form  of  mutual  benefit  for  the  entire  class  of 
wage  earners  has  by  no  means  been  accomplished.  The  only 
practicable  method  of  accomplishing  this  is  by  means  of  com- 
pulsory insurance,  which  usually  carries  with  it  the  shifting  of 
a  certain  portion  of  the  burden  from  employee  to  employer. 

The  United  States  Commissioner  of  Labor  has  investigated 
the  subject  of  state  insurance,  and  the  government  has  published 
a  comprehensive  and  exhaustive  report  on  the  subject,  which  in 

3U 


SOCIAL  INSURANCE  315 

common  with  the  many  highly  valuable  reports  of  the  govern- 
ment, is  readily  available.  In  this  respect,  the  United  States 
is  far  in  advance  of  other  countries  in  the  complete  and  thorough 
reports  and  investigations  of  a  wide  variety  of  subjects  made 
by  its  experts,  while  their  ready  accessibility  increases  their 
value. 

The  reports  cover  not  only  the  German  governmental  insur- 
ance systems  but  also  those  of  other  countries,  but  as  Germany 
was  the  pioneer  in  this  field,  and  the  systems  of  other  countries 
have  been  largely  based  on  hers,  the  reports  refer  most  fre- 
quently to  that  system.  The  subject  is  so  great  that  only  its 
salient  features  can  be  touched  upon  here,  and  the  leading 
features  of  the  German  system  will  be  principally  consid- 
ered. 

The  Commissioner's  report  states: 

"Germany  by  its  act  of  June  15,  1883,  was  the  first  to  in- 
troduce the  compulsory  sickness  insurance  sj-stem  on  a  national 
scale,  and  its  example  was  followed  by  Austria  in  1888,  Hun- 
gary in  1891,  Luxemburg  in  1901  and  recently  by  Norway  in 
1909. 

"In  all  these  countries,  an  effort  was  made  to  retain  the  sick 
benefit  societies  existing  at  the  time  when  this  legislation  was 
enacted,  as  it  was  felt  that  local  administration  and  self-govern- 
ment were  necessary  for  the  success  of  this  system,  and  there- 
fore a  great  variety  of  organizations  is  found  in  the  countries 
mentioned,  even  under  the  uniform  system  of  compulsion. 
Funds  based  upon  geographic  limits,  establishment  funds, 
trade  funds,  and  others  frequently  operate  side  by  side,  though 
at  the  present  time  the  tendency  is  to  strengthen  the  funds  based 
on  geographic  limits. 

"The  rapid  development  of  the  compulsory  sickness  insur- 
ance idea  is  demonstrated  by  the  numerous  proposals  in  favor 
of  the  compulsory  system  in  various  countries  in  which  as  yet,  it 
does  not  exist.  Thus  France,  Italy,  Russia,  and  Switzerland 
may  be  mentioned  as  countries  in  which  proposals  for  compul- 
sory sickness  insurance  have  been  seriously  considered  within 
recent  years. 

"The  growing  importance  of  the  subject  of  employees'  insur- 
ance in  this  countiy,  is  indicated  by  the  fact  that  within  recent 
years,  eight  states,  Connecticut,  Illinois,  ^Massachusetts,  :\Iinne- 
sota.  New  Jersey,  New  York,  Ohio  and  Wisconsin,  and  the  Fed- 
eral Government  have  appointed  commissions  to  study  methods 


316  THE  PRICE  OF  INEFFICIENCY 

of  compensating  workmen  for  disability  incurred  in  the  course 
of  their  employment. 

"As  a  result  of  these  activities,  one  state,  New  York,  has  al- 
ready enacted  laws  of  general  application,  while  two  states, 
Montana  and  Maryland,  have  made  provision  for  state  systems 
of  co-operative  insurance  against  accidents  to  workmen  engaged 
in  mining. 

"  'Social  insurance'  may  be  defined  as  the  method  of  organ- 
ized relief,  by  which  wage  earners  or  persons  similarly  situated, 
and  their  dependents  or  survivors,  become  entitled  to  specified 
pecuniary  or  other  benefits,  on  the  occurrence  of  certain  emer- 
gencies. The  right  to  these  benefits  is  secured  by  means  of 
contributions  from  wages,  or  by  the  fact  of  the  insured  person's 
employment,  or  by  his  citizenship  or  residence  in  the  country. 

''The  various  forms  of  social  insurance  may  be  designated 
as: 

"1.  Accident. 
"2.  Sickness. 


I  < 


<  i 


3.  Maternity. 

4.  Invalidity  and  old  age. 

5.  Unemployment. 

"6.  Insurance  for  widows  and  orphans. 

"The  principle  of  systematic  compensation  for  losses  due  to 
industrial  accident  has  been  long  known  in  Europe  for  the 
earliest  examples  are  found  in  the  mining  industries,  especially 
in  Germany  and  Austria.  As  these  industries  were  the  first  to 
be  operated  on  a  large  scale,  with  large  numbers  of  employees 
whose  life  and  safety  depended  on  the  care  and  skill  of  the 
manager  and  of  the  fellow  workmen,  and  in  addition  had  a 
high  danger  rate,  it  was  but  natural  that  attempts  should  be 
made  to  provide  in  a  definite  manner  for  the  relief  of  the  dis- 
tress of  employees  caused  by  accidental  injuries  or  physical 
disability. 

"The  industry  of  navigation  possessed  similar  characteristics 
and  also  developed  at  an  early  date,  comparatively  well-defined 
systems  of  relief  for  disability  arising  from  the  operation  of 
vessels.  The  next  industry  to  be  operated  on  a  large  scale  and 
which  had  at  the  same  time  a  high  trade  risk,  was  that  of  rail- 
road transportation,  and  in  the  states  of  the  present  German 
Empire,  we  find  early  efforts  to  make  provision  for  railway  em- 


SOCIAL  INSURANCE  317 

ployees  on  a  more  liberal  scale  than  that  prevailing  in  the  man- 
ufacturing industries. 

"With  the  development  of  large  scale  industries  and  the  more 
frequent  use  of  machine  power,  together  with  the  increase  in 
the  size  of  industrial  establishments,  there  was  an  increase  in 
the  trade  risk  of  the  industries  so  affected.  Previous  to  the  de- 
velopment of  large  scale  production,  a  comparatively  simple 
system  of  compensation  for  industrial  accidents  prevailed  in 
nearly  all  the  countries  in  the  world,  based  upon  the  idea 
that  a  workman  suffering  an  injury  from  industrial  accident 
should  be  compensated  by  the  person  or  persons  at  fault  in 
causing  the  accident.  The  relief  provided  under  the  Civil  Code 
in  continental  Europe,  was  more  readily  obtainable  than  that 
permitted  under  the  English  law,  but  in  each  case,  the  person 
liable  was  supposed  to  have  committed  some  fault  and  it  was 
necessary  for  the  plaintiff  to  bring  suit  and  prove  such  fault, 
of  negligence,  according  to  the  rules  of  evidence  prevailing  in 
the  courts  of  each  country." 

The  system  of  bringing  suits  is  the  one  in  vogue  throughout 
the  United  States,  and  as  is  well  known,  works  great  hardships 
un  the  injured  and  is  subject  to  grave  abuses. 

Large  employers  are  constantly  the  victims  of  conspiracies, 
while  the  case  of  an  innocent  victim  of  an  accident  is  often 
defeated  by  perjured  testimony  introduced  by  the  employer. 
Lawyers  divide  the  larger  part  of  the  benefits,  and  the  length 
of  time  taken  to  secure  the  compensation  is  one  of  the  reproaches 
of  the  American  judicial  system. 

The  state  of  New  York  recently  enacted  a  new  employers' 
liability  law,  but  it  was  declared  unconstitutional  by  the  courts 
and  thus  no  practical  headway  has  been  made  to  correct  the 
bad  practice  of  the  plan  of  compensation  for  accidents  at  pres- 
ent in  vogue.  One  of  its  worst  features  is  the  fact  that  the 
awards  by  juries  are  irregular  and  disproportionate,  some  juries 
awarding  more  for  the  loss  of  a  hand  than  others  do  for  the 
loss  of  an  arm,  while  a  leg  is  often  more  highly  valued  than  a 
life. 

Mr.  Frederick  C.  Howe  in  "How  Germany  Cares  for  Her 
"Working  People,"  in  the  OutlooJc  of  May,  1910,  explains  in  an 
interesting  way  the  main  outlines  of  the  system : 

"Insurance  against  sickness  has  been  provided  since  1884. 
It  is  provided  for  those  employed  in  factories,  mines,  work 
shops,  quarries,  transportation  and  other  industries.     Employees 


318  THE  PRICE  OF  INEFFICIENCY 

of  public  enterprises  are  also  covered.  The  provisions  of  the 
law  are  limited  to  those  whose  wages  are  below  $500  a  year. 
The  sickness  insurance  funds  are  of  various  kinds.  There  are 
local  funds  provided  by  the  parishes  for  all  of  the  trades  within 
their  limits.  Some  of  the  large  industries  have  funds  of  their 
own,  as  do  the  mine  owners  and  the  contractors  in  the  building 
trades. 

"All  of  the  funds  provide  for  free  medical  attendance  and 
supplies  as  well  as  sick  pay  from  the  third  day  of  sickness. 
The  benefits  amount  to  one-half  of  the  daily  wages  received  by 
the  beneficiary  or  the  amount  upon  which  his  assessment  is 
based.  Benefits  are  continued  for  not  more  than  twenty-six 
weeks,  after  which  time,  if  the  illness  still  continues,  the  burden 
is  transferred  to  the  Accident  Insurance  Fund. 

"The  insurance  fund  in  Gennany  is  sustained  by  the  work- 
ing men,  the  employers  and  to  some  extent  by  the  community. 
Generally  the  employee  pays  two-thirds  of  the  premium,  and 
the  employer  one-third,  the  liability  of  both  being  ascertained 
by  periodic  reports  from  the  employer  as  to  the  number  of  em- 
ployees liable  to  insurance.  The  premiums  are  collected  by 
stoppage,  the  employer  deducting  the  assessments  of  the  em- 
ployees when  wages  are  paid,  which,  along  with  his  own  share, 
are  then  transmitted  to  the  fund. 

"The  administration  of  the  funds  is  largely  in  the  hands  of 
the  working  people  themselves,  through  a  board  chosen  by  the 
employers  and  the  employees.  General  meetings  are  held  at 
which  all  persons  who  contribute  to  the  fund  may  come,  at  which 
meetings  the  delegates  who  have  charge  of  the  insurance  are 
elected.  About  12,000,000  persons  are  insured  against  sickness 
in  the  German  Empire, 

"The  provisions  of  the  law  of  the  insurance  fund  against  ac' 
cident,  cover  substantially  the  same  classes  as  the  sickness  in- 
surance, and  the  method  of  administration  is  substantially  the 
same.  The  employer  is  bound  to  provide  insurance  against 
accident,  as  in  the  case  of  sickness.  Upon  opening  a  factory, 
he  automatically  becomes  a  member  of  the  trade  association 
covering  his  business,  and  is  bound  to  contribute  to  the  insur- 
ance fund.  This  fund  is  managed  by  the  executive  board  of 
the  trades,  which  has  power  to  classify  trades  and  fix  the  dan- 
ger schedule.  But,  better  than  this,  the  board  has  power  to 
enforce  rules  and  appliances  for  the  prevention  of  accident. 
If  a  member  refuses  to  abide  by  the  ruling  of  the  hoard,  he 


SOCIAL  INSURANCE  319 

may  be  fined  for  his  neglect,  or  his  danger  rating  is  increased. 
"By  this  means  the  employers  are  stimulated  to  an  interest 
in  safety  devices,  while  the  special  knowledge  on  the  part  of 
the  individual  trade  association  leads  to  a  better  administration 
of  the  rules  than  would  be  possible  on  the  part  of  the  state. 
In  all  of  these  matters,  the  employees  are  consulted.  They  are 
also  allowed  representation  on  the  executive  board. 

"Benefits  under  the  accident  insurance  law  are  not  left  to 
judicial  inquiry.  The  employee  is  not  put  to  the  expense  and 
delay  of  long  litigation.  Even  though  the  employee  is  negli- 
gent, he  is  entitled  to  compensation,  unless  there  should  be  evi- 
dence that  he  intentionally  brought  the  accident  upon  himself. 
Here,  as  in  sickness,  the  cost  of  human  wreckage  in  industry  is 
shifted  in  part  on  the  cost  of  production.  It  is  passed  on  to 
the  community  where  it  belongs. 

"The  amount  of  the  compensation  paid  depends  upon  the 
wages  of  the  employee  and  the  extent  of  the  injury.  If  the 
accident  wliolly  incapacitates  the  worker,  he  receives  a  full  pen- 
sion, which  amounts  to  two-thirds  of  his  yearly  wage.  If  he 
is  still  able  to  work,  the  pension  is  adjusted  to  his  earning  abil- 
ity. In  case  of  accident  resulting  in  death,  an  immediate  pay- 
ment of  about  one-sixth  of  the  yearly  wage  is  paid.  In  ad- 
dition to  this,  the  widow  and  dependent  children  are  pensioned, 
the  widow  until  her  death  or  remarriage  and  the  dependent 
children  up  to  their  fifteenth  year.  In  this  event,  the  annual 
pension  does  not  exceed  60%  of  the  annual  wage. 

"Not  only  is  the  German  workman  thus  insured  against  sick- 
ness, which  marks  the  beginning  of  much  of  the  poverty  of  our 
cities,  as  well  as  against  the  accidents  of  industrial  establish- 
ments, which  fill  the  hospitals  with  the  bulk  of  their  patients, 
but  practically  all  German  workmen  are  insured  against  old 
age.  Those  whose  earnings  exceed  $500  are  not  covered  by  old- 
age  insurance,  nor  are  the  higher  class  of  employees  and  serv- 
ants. The  administration  of  this  branch  is  carried  on  by  in- 
surance societies,  which  cover  certain  sections,  or  by  the  state 
at  large. 

"All  of  them  are  under  the  supervision  of  the  state  and  are 
controlled  by  the  employers  and  the  employees.  The  old-age 
funds  are  supplied  by  the  employers  and  the  employees,  who  con- 
tribute in  equal  shares  to  the  fund.  To  this  the  Empire  adds 
$12.50  towards  every  pension. 

"The  success  of  these  insurance  schemes  is  seen  by  the  num- 


320  THE  PRICE  OF  INEFFICIENCY 

ber  of  members  enrolled.  There  were  23,679,000  insured 
against  accident  in  1908  and  15,266,000  against  old  age,  and 
13,189,600  against  sickness.  The  total  expenditures  of  the  vari- 
ous funds  amounted  to  over  $183,675,000  while  the  funds  ac- 
cumulated as  a  reserve  exceeded  $521,000,000." 

In  "The  German  Drift  towards  Socialism,"  by  William  C. 
Dreher,  in  the  Atlantic  Monthly  for  July,  1911,  the  general  re- 
sults are  summed  up  as  follows: 

"The  aggregate  revenues  of  the  three  systems  in  1908  were 
$214,856,675  and  they  paid  out  $165,000,000  in  pensions  and 
indemnities. 

"They  owned  invested  funds  amounting  to  $496,000,000. 
The  contributions  in  the  three  systems  have  been  estimated  by 
careful  statisticians  at  6.75%  of  the  wages  received  by  the  in- 
sured, of  which  the  employers  pay  3.68%  and  the  employed 
3.07%.  The  insurance  payments  have  a  serious  effect  on  the 
finances  of  employers.  Thus  far,  the  famous  Krupp  company, 
in  1908,  paid  $807,000  in  insurance  money,  which  was  in  the 
ratio  of  $13.60  to  $100  of  net  profits.  Another  great  iron  com- 
pany paid  into  the  insurance  fund  a  ratio  equivalent  to  $22  in 
$100  and  another  nearly  $47  in  $100. 

"Of  course  such  expenses  in  addition  to  heavy  general  taxa- 
tion, must  prove  a  serious  handicap  to  German  industry;  and 
it  is  not  to  be  wondered  at  that  the  feeling  is  gaining  ground 
among  the  employers  that  they  are  doing  enough  for  their  help. 
Yet  there  is  no  indication  that  social  reform  legislation  is  to  be 
checked.  The  bill  before  the  Reichstag,  referred  to  above,  ex- 
tends sick  insurance  to  farm  laborers  and  household  servants, 
a  change  which  will  raise  the  burden  of  this  system  for  employ- 
ers from  $24,000,000  to  $36,000,000.  The  bill  also  provides  for 
pensioning  the  widows  and  orphans  of  insured  laborers  at  an  es- 
timated additional  expense  of  about  $17,000,000,  The  Imperial 
government  has  also  just  published  a  bill  for  establishing  an 
entirely  independent  system  of  insurance  for  the  protection  of 
persons  not  included  in  the  labor  systems;  it  will  apply  practi- 
cally to  all  employed  persons  having  a  salary  less  than  $1,200." 

While  Germany  had  in  1908  a  population  of  63,000,000,  the 
number  of  wage  earners  was  16,000,000,  of  which  5,000,000  were 
women,  a  proportion  of  wage  earners  to  population  of  slightly 
less  than  one  in  four.  The  United  States  with  a  population  of 
90,000,000  has  33,000,000  wage  earners,  a  ratio  of  one  to  two 
and  three-quarters. 


Social  insurance  321 

In  1900  th^re"  were  4,833,630  women  wage-earners  according 
to  the  U.  S.  Census,  and  it  is  now  estimated  that  the  number  ex- 
ceeds 7,000,000,  which  is  proportionately  in  excess  of  the  num- 
ber of  women  employed  in  Germany", 

The  impression  that  more  women  have  to  work  in  Germany 
than  in  America,  is  thus  seen  to  be  gi-oundless.  The  German 
woman,  working  more  in  the  open,  is  further  more  healthfully 
employed  than  the  American  woman,  the  larger  part  of  whose 
work  is  done  in  closed  quarters,  such  as  factories,  sweat-shops, 
offices,  etc.,  and  the  result  is  shown  in  the  more  robust  and  vigor- 
ous physique  of  the  German  woman. 

Further,  the  number  of  women  wage-earners  in  Germany  can- 
not be  compared  with  the  number  in  the  United  States,  since 
such  a  large  proportion  of  the  German  wage  earning  women  are 
household  servants;  German  domestic  customs  being  such  that 
families  of  even  limited  means  have  servants.  There  is  no  stigma 
attached  in  Germany  to  domestic  service  and  the  result  is  an 
abundance  of  competent  help  for  the  housewives  and  a  rule  of 
well  kept  homes  which  is  almost  unknown  in  America. 

The  more  favorable  proportion  of  wage  earners  to  population 
is  due  to  the  fact  that  the  German  retires  much  sooner  to  live 
on  his  pension,  while  as  a  youth  he  begins  to  be  a  wage  earner 
later  in  life  than  the  American  boy. 

Owing  to  the  German  custom  of  contracts  with  employers, 
the  profits  of  any  gainful  occupation  that  may  be  engaged  in 
after  business  hours,  including  inventions  in  the  line  of  work 
of  the  employment,  go  to  the  employer  under  certain  circum- 
stances. This  still  further  identifies  the  interests  of  employers 
and  employees,  and  prevents  the  switching  from  one  business  to 
another  so  prevalent  in  America.  Though  it  discourages  indi- 
vidual initiative,  it  promotes  a  life  of  ease  during  the  evening, 
since  the  employee  will  hardly  devote  much  energy  to  outside 
tasks  the  fruits  of  which  go  to  his  employer.  It  accomplishes, 
however,  the  object  sought,  of  having  the  employees  come  fresh 
to  work,  with  their  entire  energy  reserved  for  their  daily  work, 
and  not  used  up  in  outside  schemes. 

It  will  be  noted  that  all  wage  earners  are  in  three  different 
insurance  systems,  sickness,  accident  and  old  age  or  invalidity. 
Thus  all  eventualities  are  provided  for. 

Mr.  Howe,  in  the  Outlook,  says  further: 

"Aside  from  the  positive  accomplishments  of  the  German 
Empire  in  this  line  of  social  reform,  one  is  impressed  with  the 


322  THE  PRICE  OF  INEFFICIENCY 

seriousness  with  which  the  cities  as  well  as  the  nation  are  con- 
sidering the  whole  question.  There  are  frequent  conferences 
attended  by  representatives  from  the  Empire  and  the  various 
states,  from  the  cities,  the  universities  and  the  philanthropic 
societies.  There  is  nothing  hit  or  miss  about  it.  The  best 
thought  of  the  university  and  the  most  energetic  of  city  officials 
are  constantly  studying  ways  and  means  for  the  relief  of  the 
numerous  problems  which  arise  in  connection  with  unemploy- 
ment, with  the  hazards  of  industry,  with  the  poor  and  destitute 
members  of  the  community. 

"Poverty  has  not  been  abolished  in  Germany,  nor  has  the 
housing  question  been  solved.  Industrial  depression  takes  its 
tribute  there  just  as  it  does  with  us.  But  the  impressive  thing 
about  it  all  is  that  the  nation  views  these  questions  in  something 
of  the  same  light  that  it  does  the  building  of  dreadnaughts,  or 
railways,  of  canals,  the  adjustment  of  taxes  and  the  building  of 
cities. 

"Germany  more  than  any  other  country  in  Europe  has  en- 
tered on  a  comprehensive  programme  of  human  salvage.  She 
is  devoting  her  thought  and  her  energy  to  the  making  of  people 
as  well  as  of  things." 

According  to  Oberbergrat  Kratz  on  "German  Labor  In- 
surance," in  Deiitschland  als  Weltmacht,  the  governmental  in- 
surance system  paid  out  in  1908  for  sickness,  324,785,767  marks 
($81,196,441),  covering  5,655,836  cases.  The  management  of 
the  system  cost  19,209,686  marks,  which  is  5.4%. 

In  accident  insurance  Germany  paid  out  in  1908,  157,062,- 
870  marks  ($39,265,718).  The  total  benefits  paid  on  accidents 
from  1885  to  1908  amounted  to  1,615,364,647  marks  ($403,841,- 
161). 

The  sickness  insurance  fund  amounted  in  1908  to  279,860,- 
685  marks  ($69,965,171),  to  which  must  be  added  the  reserve 
funds  of  insurance  institutes  which  is  1,390,943  marks  and  also 
the  property  owned,  52,249,910  marks,  a  total  of  $83,375,383. 

Some  of  the  leading  provisions  of  the  German  law  are  as  fol- 
lows: 

All  workmen  and  administrative  officers,  the  latter  provided 
that  their  annual  earnings  in  wages  or  salary  does  not  exceed 
3,000  marks  ($714)  are  insured,  according  to  the  provisions  of 
this  law,  against  the  results  of  accidents  occurring  to  them  in 
the  course  of  the  employment,  if  they  are  employees: — 

1,  In  mines,   salt   works,   establishments   in   which    ores   are 


SOCIAL  INSURANCE  323 

treated,  quarries,  pits,  ship  yards,  yards  for  preparing  build- 
ing materials  and  in  factories,  commercial  breweries  or  smelting 
works. 

2.  In  industrial  establishments  which  include  the  execution 
of  masonry,  carpentry,  roofing  or  other  building  work  declared 
by  decision  of  the  Federal  Council  to  be  subjected  to  insurance, 
stone  cutting,  locksmithing,  smithing,  or  well  digging,  and  also 
establishments  engaged  in  chimney  sweeping,  window  cleaning 
or  butchering. 

3.  In  the  administration  of  the  post  office,  telegraph  and  rail- 
roads, and  in  the  administration  of  the  navy  and  army,  includ- 
ing that  of  building  operations  which  are  carried  on  by  these 
departments  on  their  own  account. 

4.  In  the  business  of  carting,  internal  navigation,  rafting  of 
wood,  transportation  on  ferry  boats  and  flat  boats,  tugging  or 
dredging. 

5.  In  the  business  of  expressing  and  storing  goods  and  in  that 
of  cellerage. 

6.  In  the  establishments  of  goods  packers  and  loaders,  goods 
sorters,  weighers,  measurers,  inspectors  and  stowers. 

7.  In  the  work  of  storage,  tree  felling,  or  work  connected  with 
the  transportation  of  persons  or  goods  if  such  work  is  done  for 
a  commercial  establishment  the  proprietor  of  which  is  inscribed* 
in  the  commercial  register. 

The  insurance  extends  to  domestic  and  other  service  to  which 
insured  persons  are  assigned  by  their  employers  or  by  the  em- 
ployer's agents  in  connection  with  their  employment  in  the  es- 
tablishment. 

In  case  of  disability  compensation  is  rendered  as  follows: 
From  the  beginning  of  the  fourteenth  week  after  the  date  of 
the  accident: 

1.  Free  medical  treatment,  medicine  and  other  means  of  heal- 
ing, also  the  facilities  (crutches,  supporting  apparatus,  etc.) 
to  insure  the  success  of  the  treatment  and  diminish  the  effects 
of  the  injury. 

2.  A  pension  as  long  as  the  disability  lasts. 
The  amount  of  the  pension  is — 

(a)  In  the  case  of  total  disability  and  as  long  as  it  lasts,  two- 
thirds  of  the  annual  earnings  (full  pension). 

(b)  In  the  ease  of  partial  disability  and  as  long  as  it  lasts, 
a  part  of  the  full  pension  proportionate  to  the  loss,  through  the 
accident,  of  the  earning  capacity   (partial  pension). 


324  THE  PRICE  OF  INEFFICIENCY 

If,  in  consequence  of  the  accident,  the  injured  person  is  ren- 
dered not  only  entirely  incapable  of  work,  but  also  sufficiently 
helpless  as  to  require  attendance  and  care  from  others,  the  pen- 
sion is  to  be  increased  to  100%  of  the  annual  earnings  as  long 
as  this  condition  continues. 

If  the  injured  person  was,  at  the  time  of  the  accident,  already 
suffering  from  total  and  pennanent  disability,  no  compensation 
is  made  save  that  prescribed  in  paragraph  first  of  this  article. 
If  such  injured  person  has  been  rendered  helpless  by  the  acci- 
dent as  to  require  attendance  and  care  from  others,  a  pension 
of  not  more  than  one-half  of  the  full  pension  shall  be  granted. 

If,  on  account  of  the  accident,  the  injured  person  is  actually 
out  of  work  through  no  fault  of  his  own,  the  board  of  directors 
of  the  association  may  temporarily  increase  the  partial  pension 
to  the  amount  of  the  full  pension. 

In  the  case  of  death,  the  following  compensation  is  also  made : 

1.  As  a  funeral  benefit,  one-fifteenth  of  the  annual  earnings, 
which  shall  be  determined  according  to  Article  10,  paragraphs 
1  to  4,  but  the  grant  shall  never  be  less  than  50  marks  ($11.90). 

2.  A  pension  to  be  paid  to  survivors  from  the  day  of  the  de- 
ceased person's  death.  (This  consists  of  a  proportion  of  his 
annual  earnings  and  is  calculated  in  a  complicated  way  accord- 
ing to  the  circumstances  of  the  case.) 

If  the  deceased  leaves  a  widow  or  children,  the  pension  for 
the  widow,  up  to  the  time  of  her  death,  or  remarriage,  and  for 
every  surviving  child,  up  to  the  completion  of  its  fifteenth  year, 
shall  be  for  each,  20%  of  the  annual  earnings,  but  in  no  case 
is  such  total  to  be  more  than  the  husband  would  have  received 
for  total  disability. 

In  the  case  of  her  remarriage,  the  widow  shall  receive  60% 
of  the  annual  earnings  as  a  settlement. 

If  at  the  time  of  the  accident,  the  deceased  was  married  but 
was,  on  account  of  her  husband's  invalidity,  wholly  or  mainly 
responsible  for  the  support  of  the  family,  the  following  pensions 
shall  be  granted  as  long  as  the  need  continues: 

(a)  to  the  widower,  20%. 

(b)  to  every  surviving  child  up  to  the  completion  of  its  fif- 
teenth year,  20%  of  the  annual  earnings. 

If  the  deceased  person  leaves  parents  or  grandparents  (as- 
cendants) whom  he  was  partly  or  mainly  supporting,  they  shall 
receive  until  the  need  ceases,  a  total  pension  of  20%  of  the 
annual  earnings. 


SOCIAL  INSURANCE  325 

It  will  be  seen  that  in  this  system  there  is  no  possibility  of  the 
awards  of  large  sums  as  in  the  United  States,  and  thus  no  great 
incentives  are  hung  up  for  litigation,  and  as  the  lawyers  have 
little  or  nothing  to  do  with  the  matter  any^vay,  a  great  social 
waste  is  saved. 

Indeed  the  companies,  which  under  a  complicated  system  of 
determining  their  proper  shares  of  contributions  to  the  funds, 
might  be  supposed  to  be  anxious  to  utilize  technicalities  to 
escape  their  payments,  are  rather  inclined  to  liberality  than  the 
reverse,  and  do  not  usually  confine  their  payments  to  the  pen- 
sion funds  to  the  minimum,  preferring  by  substantial  contribu- 
tions over  their  minimum  requirements,  to  gain  the  good  will 
of  employees  and  others  in  interest,  with  the  consequent  moral 

effect. 

The  idea  of  an  American  corporation  paying  more  for  any- 
thing than  required  by  dire  legal  necessity,  and  for  the  sake 
of  good  will  of  employees,  is  a  condition  too  rare  to  need  much 
consideration. 

The  beginnings  of  sickness  insurance  may  be  traced  further 
back  than  those  of  insurance  against  accidents  or  any  other  form 
of  social  insurance.  These  beginnings  are  to  be  found  in  the 
organization  of  mutual  aid,  and  are  not  limited  to  any  special 
social  group.  From  this  form  of  purely  voluntary  organization 
supported  exclusively  by  the  contributions  of  its  members,  there 
has  been  a  steady  development  towards  compulsory  siclmess  in- 
surance, strictly  regulated,  and  in  some  cases  assisted  by  the 
state,  but  the  development  is  far  from  complete,  and  the  com- 
pulsory system  has,  as  yet,  been  adopted  mainly  by  Germany 
and  Austria.  The  important  feature  of  this  development  has 
been  the  fact  that  the  mutual  aid  society  was  found,  for  many 
reasons,  to  be  the  most  convenient  organization  for  the  purpose 
of  accomplishing  compulsory  sickness  insurance.  Briefly,  the 
evolution  of  sickness  insurance  may  be  said  to  be  by  the  fol- 
lowing four  stages: 

1.  Free  and  voluntary  associations  entirely  unregulated  by 
law. 

2.  Regulation  by  law,  either  compulsory,  for  all,  or  optional 
with  classification  of  societies  into  recognized  and  unrecognized. 

3.  Regulation  combined  with  government  assistance. 

4.  Compulsory  insurance. 

With  the  growth  of  workmen's  accident  insurance  systems 
the  burden  of  industrial  accidents  has  fallen  less  heavily  on  the 


326  THE  PRICE  OF  INEFFICIENCY 

mutual  benefit  societies,  yet  it  has  been  found  advantageous, 
both  in  Germany  and  Austria,  to  have  the  care  of  aU  accidents 
left  during  the  earlier  stages  to  the  sickness  insurance  system. 
The  advantages  of  such  a  combination  are,  on  the  one  hand,  the 
speed  of  relief,  and  on  the  other  hand,  the  comparative  simplic- 
ity of  administration  and  supervision,  which  tends  to  reduce 
malingering.  In  other  countries,  where  there  is  no  such  well- 
organized  system  of  compulsory  insurance,  the  compensation 
laws  frequently  provide  for  a  certain  waiting  period  during 
which  accidents  are  not  compensated,  and  the  duty  of  furnish- 
ing relief  in  such  cases  usually  falls  upon  the  mutual  benefit 
societies. 

A  study  of  organizations  for  sickness  insurance  shows  how 
closely  sickness  is  interwoven  with  the  causes  of  economic  dis- 
tress. From  the  point  of  view  of  causation,  it  is  often  difficult 
to  draw  the  line  between  sickness  and  accident,  while  on  the 
other  hand,  sickness  may  develop  into  more  or  less  permanent 
invalidity. 

In  its  earliest  forms,  the  mutual  benefit  society  naturally  gave 
assistance  in  all  cases  of  disability,  whether  due  to  sickness  or 
accident,  and  the  duration  of  the  assistance  varied  with  the 
financial  strength  of  the  organization.  The  accumulation  of 
actuarial  data  has  placed  sickness  insurance  on  a  definite  insur- 
ance basis,  and  more  careful  differentiation  between  the  vari- 
ous causes  and  forms  of  infirmity  has  resulted. 

Nevertheless,  for  practical  purposes  of  administration,  it  is 
often  found  of  advantage  not  to  draw  the  line  too  strictly. 

One  of  the  most  recent  developments  of  insurance  in  Germany 
is  a  law  in  reference  to  mining,  which  arose  out  of  a  disaster  in 
a  coal  mine  in  Westphalia.  The  miners  believed  it  could  have 
been  prevented  by  a  more  perfect  and  frequent  system  of  in- 
spection of  the  mine,  and  the  legislation  now  in  effect  provides 
for  the  election  by  the  miners  themselves  at  each  colliery,  of 
their  own  inspectors,  who  examine  the  underground  conditions 
at  least  once  a  month,  and  at  the  owner's  expense.  Thus  the 
workmen  have  in  their  own  hands  the  means  of  protecting  them- 
selves. 

Quoting  again  from  the  Commissioner  of  Labor,  he  states 
in  reference  to  maternity  insurance : 

"This  branch  of  social  insurance  is  still  little  developed  in 
most  countries  and  is  usually  combined  with  the  general  system 
of  sickness  insurance.     The  employment  of  women  in  industry, 


SOCIAL  INSURANCE  327 

however,  has  emphasized  the  importance  of  this  form  of  in- 
surance and  also  the  differences  between  the  provisions  for  ma- 
ternity and  the  provision  for  ordinary  sickness,  which  make  a 
separate  treatment  of  this  topic  advisable  from  an  administra- 
tive point  of  view.  The  two  main  points  of  difference  may  be 
stated  as  follows: 

"First,  maternity  is  a  natural  process  which  though  calling 
for  medical  help,  in  modern  society  usually  runs  a  normal 
course  and  requires  a  definite  normal  length  of  absence  from 
work. 

' '  Second,  also  unlike  sickness,  it  requires  the  absence  from  work 
for  some  time  before  the  actual  occurrence  of  childbirth.  The 
actuarial  factors  upon  which  a  system  of  maternity  insurance 
must  be  built  are  different  in  that  it  concerns  only  the  female 
wage  earners  and  those  only  within  certain  well  defined  age 
periods,  while  the  social  purpose  is  even  broader  than  that  of 
ordinary  sickness  insurance  in  that  it  concerns  not  only  the 
wage  worker,  but  the  future  generation.  The  purpose  of  mater- 
nity insurance  is  not  only  that  of  assistance  to  the  mother  but 
also  the  reduction  of  infant  mortality. 

' '  The  earlier  efforts  toward  accomplishing  these  aims  consisted 
in  legislation  regulating  conditions  of  work  of  mothers  for  some 
time  before  and  after  childbirth,  so  as  to  prevent  the  occurrence 
of  various  diseases  and  accidents  frequently  connected  with 
childbirth.  The  period  varies  in  the  legislation  of  different 
countries,  usually  embracing  from  four  to  six  weeks.  This 
again,  unlike  sickness  legislation  itself,  in  case  of  maternity 
forces  a  period  of  idleness  upon  the  female  wage  earners  and 
therefore  creates  a  need  for  financial  assistance." 

In  Italy  the  law  proposed  in  1909  contemplated  an  equal  con- 
tribution from  employer  and  employee  of  a  sum  equal  to  three 
quarters  of  the  pay  for  twenty-eight  days. 

"The  earliest  known  forms  of  provision  for  the  aged  are  the 
systems  of  charitable  relief  in  the  form  of  outdoor  relief  and  of 
institutional  relief,  although  neither  of  these  forms  can  be 
designated  as  features  of  a  social  insurance  system.  In  some 
employments,  as,  for  instance,  that  of  the  various  government 
factories,  pensions  for  superannuated  or  invalid  employees  have 
been  customary  in  Europe  for  many  years.  In  addition,  many 
private  establishments  in  Europe  have  been  accustomed  to  pen- 
sion aged  or  infirm  employees  after  long  terms  of  service;  such 
pensions  are  often  entirely  paid  by  the  employer,  the  purpose 


328  THE  PRICE  OF  INEFFICIENCY 

oi"  llic  siiperanmialion  pension  in  such  establishments  being  to 
se(;iire  continuity  of  service  from  the  employees. 

"The  pensions  just  mentioned,  however,  have  affected  only  a 
small  proportion  of  the  persons  generally  included  in  a  system 
of  social  insurance.  The  first  forms  of  old-age  and  invalidity 
insumnce  proper  are  found  in  the  mutual  organizations  of  vari- 
ous kinds,  sucli  as  the  miners'  relief  funds,  seamen's  funds, 
trade  union  funds,  mutual  aid  societies  and  the  like.  "When 
these  organizations  adopted  systems  of  old-age  or  invalidity 
pensions  it  was  usually  without  an  adequate  insurance  basis  in 
so  far  as  the  liabilities  being  secured  by  the  assets  is  concerned, 
and  at  the  prestnit  time,  even,  many  voluntary  insurance  organi- 
zations are  endeavoring  to  provide  old-age  and  invalidity  in- 
surance without  an  adequate  income  in  view  of  the  liabilities. 

"Under  all  of  the  accident  compensation  systems  a  fatal  ac- 
cident covered  by  the  compensation  law  is  compensated  by  a 
b(Mierit  in  some  form  to  the  survivors  of  the  insured  person. 
These  benefits  usually  take  the  form  of  either  a  lump  sum  pay- 
ment distributed  to  the  widows  for  life  or  until  remarried  and 
a  pension  to  the  children  until  a  certain  age  is  reached.  It  is 
evident  that  many  cases  will  arise  where  the  death  of  the  in- 
sured person  leaves  the  family  in  just  as  great  distress  as  if  the 
death  had  been  caused  by  an  industrial  accident,  and  in  many 
c;iscs  file  family  is  even  in  greater  distress  because  death  may  re- 
sult after  a  long  period  of  illness  in  which  the  family  resources 
were  exhausted  in  caring  for  the  sick  person. 

"In  order  lo  make  provision  for  the  class  of  cases  just  men- 
tioned, widow  and  orphan  benefits  were  provided  by  the  miners' 
relief  funds  in  the  various  countries,  but  especially  in  Germany 
anil  Austria,  Belgium,  France  and  Great  Britain. 

"Similar  provision,  usually  amounting  to  half  the  pension  to 
which  the  deceased  was  entitled  or  was  receiving,  is  found  in 
the  case  of  some  of  the  railroad  funds  and  seamen's  funds.  In 
Germany,  at  the  present  time,  the  navigation  accident  associa- 
tion which  administers  the  compulsory  accident  and  invalidity 
insurance  t'lU"  the  seamen,  conducts  a  sj'stem  of  widow  and  or- 
phan insurance  which  is  founded  on  a  carefully  considered 
actuarial  basis.  The  German  government  now  has  under  con- 
sideration the  creation  of  a  national  compulsorj^  system  of  in- 
surance for  widows  and  orphans,  (Hinterbliebenen-Versich- 
erung). 

"In  Germany  under  the  invalidity  and  old-age  law,  in  case  a 


SOCIAL  INSURANCE  329 

member  dies  before  reaching  a  pension,  the  survivors  become 
entitled  to  the  dues  or  contributions  paid  in  by  the  insured 
person  up  to  the  time  of  his  death." 

The  various  systems  of  insurance  in  force  in  Germany  have 
proved  of  the  greatest  benefit  to  all  concerned.  The  employer 
by  small  periodical  payments  is  relieved  of  the  harassment  and 
losses  of  damage  suits  and  the  workman  is  free  from  anxiety 
and  relieved  from  distress,  such  as  the  American  workman  is 
subject  to  through  the  lack  of  cordial  relations  to  his  employers 
and  the  failure  to  recognize  that  their  interests  are  in  common. 

Students  of  economics  consider  the  superior  efficiency  of  the 
■German  workmen  on  the  whole  very  largely  ascribable  to  the 
systems  of  insurance  in  force.  The  German  working  people 
are  as  a  class  dependable  and  industrious.  They  take  a  proper 
interest  in  their  work,  are  steady  in  habits,  trustworthy  and 
thorough.  They  do  what  they  are  told  to  do  and  do  it  well. 
They  understand  their  work  and  are  not  lost  the  moment  any 
new  problem  presents  itself. 

American  workmen  would  not  attempt  to  follow  foreign  plans 
with  a  metric  system,  but  German  mechanics  may  often  be  seen 
using  original  drawings  in  the  English  system  of  feet  and  inches 
on  foreign  orders  in  difficult  engineering  work. 

The  insurance  systems  lend  a  backbone  of  confidence.  The 
wolf  cannot  approach  the  door  so  closely,  and  whatever  may 
happen,  there  is  a  margin  of  financial  safety,  a  breaku^ater  be- 
tween the  worker  and  necessity,  which  does  not  involve  charity. 
Thus  he  feels  freer  to  devote  his  energies  to  his  work  and  the 
result  is  efficiency,  indeed  the  highest  state  of  efficiency  which 
Jias  ever  been  j-eached  by  any  nation. 


CHAPTER  XXI 
TOM,  DICK  AND  HARRY 

Their  principal  concerns — Enormous  public  attention  paid  to  sports — 
The  horse  and  the  extensive  record  of  his  past  performances — The 
bloodlust  of  the  spectator  of  automobile  races — The  carnage  of  the 
racing  car — The  hundred  fatal  milestones  in  the  progress  of  aviation 
■ — The  sacrifice  of  the  lives  of  aviators  to  the  humor  of  the  crowd — 
The  harvest  of  the  football  field — Death  on  the  side  lines — The  modern 
boxing  mill — Free  flowing  of  gore  though  few  fatalities — The  base- 
ball crank — The  fascination  of  the  game — Antique  origin — Fearful 
prevalence  in  America — Great  economical  wastes  of  the  game — No 
intelligence  needed  to  be  a  baseball  fan — Hence  its  popularity — Mis- 
directed energy — The  fatal  celebrations  of  the  Fourth  of  July — 
Superfluous  patriotism — The  grim  sport  of  lynching  negroes — Ferocity 
of  this  form  of  the  lawless  execution — Due  largely  to  the  law's  delays 
— A  secret  shame. 

In  America,  a  subject  of  the  greatest  interest  to  the  general 
public  is  sport.  Tom,  Dick  and  Harry  devote  a  large  part  of 
their  mental  energy  and  monetary  resources  to  keeping  track 
of  baseball,  automobile  and  other  sporting  events. 

The  horse  has  a  large  circle  of  devotees  and  much  study  is 
spent  over  the  newspaper  sheets  showing  his  "past  perform- 
ances. ' ' 

Every  newspaper  of  consequence  has  columns,  often  several 
pages,  devoted  to  sporting  events,  and  prize  fighting,  football, 
bowling,  tennis,  golf,  rowing,  motor  boat  and  motor  cycle  rac- 
ing, swimming,  high  jumping,  broad  jumping,  standing  jump- 
ing, hammer  throwing,  foot  races,  marathon  races,  marathon 
dancing  and  various  other  sports  receive  the  most  minute  at- 
tention. 

A  peculiar  feature  of  sport  in  America  is  the  great  number 
of  spectators  compared  with  the  number  of  those  engaged  in 
the  games.  Of  the  spectators  who  assemble,  often  50,000  at 
a  single  event,  few  ever  did  or  ever  will  practice  the  sport. 
Their  interest  is  in  the  contests,  not  in  athletics,  and  in  some 
sports,  notably  that  of  automobile  racing,  a  more  sinister  in- 
terest is  manifested,  the  interest  of  seeing  a  catastrophe. 

330 


TOM,  DICK  AND  HARRY  331 

The  public  goes  so  far  even,  in  its  demands,  as  to  force  avia- 
tors to  undertake  flights  in  weather  so  dangerous  that  during 
the  past  season  two  fatal  accidents  resulted  from  this  cause. 

Automobile  racing  in  the  United  States  is  carried  on  by  pro- 
fessional promoters,  and  in  their  lust  for  money  they  excite  an 
appeal  to  the  blood  lust  of  the  spectator.  Long  races  on  roads 
are  undertaken  at  early  hours  in  the  morning,  and  the  scores 
of  thousands  of  spectators  are  up  the  whole  of  the  previous 
night  to  reach  the  locality  and  see  the  race.  They  bank  the 
track  on  both  sides  for  miles,  crowding  forward  and  it  is  only 
a  narrow  lane  that  is  left  for  the  automobilists  to  traverse.  At 
their  more  than  express  train  speeds,  the  result  is  that  more 
spectators  are  killed  than  participants. 

At  Syracuse,  N.  Y.,  on  Sept.  16,  1911,  a  racing  automobile 
swerved  from  the  track  and  plowed  a  path  through  the  crowd, 
killing  ten  people. 

"To  call  such  outrages  accidents,"  says  the  Outlook,  "is  to 
mock  the  truth.  Before  Syracuse  had  usurped  the  place,  In- 
dianapolis had  probably  the  most  prominent  position  in  the 
rivalry  for  this  form  of  slaughter. 

"That  bloodshed  and  homicide  are  accounted  among  the  at- 
tractive features  of  such  races  can  be  shown  by  the  method  of 
advertising.  What  can  Americans  say  of  the  bull-fights  of 
Spain  or  the  gladiatorial  contests  of  ancient  Rome,  when  an 
automobile  race  is  advertised  as  follows: 

"  'Shaking  dice  with  Death.  20  Dare  Devil  Drivers.  In 
Thrilling  Speed  Duels.  The  Field  vs.  Death— Which  will 
Win?'  and  when  bulletins  such  as  the  following  appear: 

"  '6:40  p.  M.     Car  No.  4  ran  into  car  No.  7, 

"  'Two  men  hurt. 

"  'Come  out  and  see  the  SPILL.' 

"It  is  hypocrisy  to  call  the  ghastly  results  of  such  races  'ac- 
cidents.' They  are  'features,'  'drawing  cards.'  Those  who  are 
killed  or  crippled  are  the  victims  of  human  sacrifice  to  the  twin 
gods  blood  lust  and  money  lust. 

"This  is  not  the  view  of  those  who  deprecate  healthful,  ro- 
bust sport,  but  of  those  who  can  distinguish  between  what  is 
robust  and  what  is  to  the  last  degree  brutal  and  murderous. 

"It  is  time  that  the  American  people  should  make  it  plain 
that  they  are  not  willing  to  let  a  crowd  here  and  there,  how- 
ever numerous,  have  its  savage  way  at  the  cost  of  the  nation's 


332  THE  PRICE  OF  INEFFICIENCY 

reputation.     If  this  pandering  to  blood  thirstiness  cannot  be 
stopped  by  public  opinion,  it  should  be  stopped  by  law." 

Barney  Oldfield,  one  of  the  best  known  of  the  racing  drivers, 
in  Popular  Mechanics  for  September,  1911,  says: 

*'I  was  never  famous  until  I  went  through  the  fence  at  St. 
Louis  and  killed  two  spectators.  Promoters  fell  over  one  an- 
other to  sign  me  up. 

"The  American  grows  sentimental  about  killing  cattle;  the 
Mexican  prefers  cattle  to  human  beings.  It  is  merely  a  mat- 
ter of  taste. 

' '  I  never  realized  my  foolishness  on  any  of  these  occasions 
until  I  was  in  the  hospital  with  the  doctors  standing  around 
and  the  nurses  looking  serious. 

''While  the  body  of  Basle  lay  still  beside  his  machine,  women 
tried  to  cut  off  pieces  of  his  clothing  as  a  souvenir.  On  the 
day  after  Basle's  death,  ten  thousand  persons  fought  for  front 
seats  at  the  track. 

"Many  newspapers  have  even  ceased  to  treat  track  racing 
as  a  sport.  Reports  of  the  big  races  are  placed  on  the  front 
page  under  a  "scare,"  with  lists  of  the  dead  and  injured  for 
the  year  printed  in  heavy  type  at  the  head  of  the  column. 

"The  dignity  of  motor  racing  is  gone.  It  has  ceased  to  be 
racing,  and  has  become  merely  a  morbid  and  unelevating  spec- 
tacle. It  is  run  for  money  alone.  Its  profits  are  blood 
money. ' ' 

The  latest  means  of  satisfying  the  spectator  is  the  aeroplane. 
No  more  hazardous  sport  can  well  be  devised.  In  this  case  the 
spectators  have  escaped  injury  for  the  most  part,  though  a 
notable  exception  among  others  is  found  in  the  death  of  the 
French  ]\Iinister  of  War,  Henry  M.  Berteaux,  who  was  killed 
by  a  swerving  aeroplane. 

Aviation  scored  100  deaths  on  October  14,  1911,  with  the 
burning  in  the  air  of  Aviator  Hans  Schmidt  in  Berne,  Switzer- 
land, while  making  an  exhibition  flight.  Of  the  100  fatalities, 
sixteen  occurred  in  America.  The  200  mark  was  reached  Oc- 
tober 8,  1912  with  the  death  of  Joseph  Stevenson  at  Birmingham, 
Ala.  Wliile  some  of  the  deaths  have  resulted  from  the  neces- 
sary risk  in  perfecting  the  aeroplane,  and  are  chargeable  to  the 
progress  of  the  art,  by  far  the  greater  number  have  been  due 
to  flights  undertaken  for  exhibition  purposes  and  the  deaths  of 
two  in  America  at  least,  J.  J.  Frisbie  in  Norton  county,  Kansas, 
and  Frank  H.  ]\Iiller  at  Mansfield,  Ohio,  were  due  to  the  unruly 


TOM,  DICK  AND  HARRY  333 

conduct  of  spectators  in  forcing  the  aviators  to  ascend  against 
their  judgment. 

The  first  of  the  aviators  to  meet  death  was  Otto  Lilienthal, 
of  Hamburg,  Germany,  who  fell  while  experimenting  with  a 
2|  horse  power  aeroplane,  on  August  10,  1896. 

Exhibition  flights,  like  automobile  racing,  constitute  a  phase 
of  the  interest  of  the  public  in  a  possible  catastrophe  that  is  on 
a  par  with  the  taste  of  the  population  of  ancient  Rome.  Avia- 
tors, mostly  daredevil  and  adventurous  men,  work  under  a 
great  nervous  strain.  The  slightest  error  may  turn  the  grace- 
ful and  steady  machine,  which  seems  to  fly  so  easily  and  safely, 
into  a  mass  of  broken  sticks  and  wires.  The  public  wagers  its 
money  against  the  aviator  making  such  a  mistake,  and  if  he 
does,  and  though  he  be  killed  the  meet  goes  on. 

The  flying  men  in  conversation  ordinarily  call  aviation  a 
''game,"  rather  than  calling  it  aviation;  as  ''he  has  been  in 
the  game  only  a  few  months,"  or  "one  of  the  best  in  the  game." 
Truly  it  is  a  "game"  when  the  public  come  to  pay. 

Another  of  the  "games"  the  public  throngs  to  see  is  the 
gentle  sport  of  football.  The  aviator  unless  he  meets  with 
serious  injury  returns  sound  and  whole,  but  every  player  that 
goes  into  a  football  field,  knows  that  days  of  soreness  and 
bruises,  if  not  sprained  limbs,  broken  bones  or  fatal  accident 
will  be  his  certain  share,  along  with  the  "glory"  of  it. 

The  manly  art  of  football  claimed  146  victims  from  1901  to 
1909,  while  1612  were  seriously  injured. 

Year  Killed  Injured 

1909  33  275 

1908  10  272 

1907  15  166 

1906  14  160 

1905  24  200 

1904  14  296 

1903  14  63 

1902  15  106 

1901  7  74 

The  high  water  mark  was  reached  in  1909  with  33  killed, 
after  which  there  was  so  much  agitation  that  the  rules  were 
changed,  resulting,  however,  in  1910  in  14  deaths  with  40  badly 
injured,  an  improvement  in  a  way.  The  14  deaths  resulted 
from  injuries  classified  as  follows: 


334  THE  PRICE  OF  INEFFICIENCY 

Body  blows   1 

Injuries  to  spine   1 

Concussion  of  brain    7 

Blood  poisoning   2 

Other  causes   3 

In  1909  the  injuries  were  of  the  following  nature: 

Critically   injured    20 

Broken  collar  bones    60 

Broken  noses 42 

Broken    legs    36 

Broken    ribs    26 

Broken  arms  24 

Broken   ankles    20 

Broken  shoulders   19 

Broken  wrists  8 

Broken  fingers    8 

Broken  hands   6 

Broken  jaws   6 

The  new  rules  under  which  football  is  now  played  are  little 
better  than  the  former  ones,  as  far  as  preventing  injury  goes. 
If  the  professors  and  student  body  can  find  no  way  of  re- 
organizing the  game,  it  is  one  that  will  sooner  or  later  have 
to  go.  There  is  also  a  darker  side  to  football,  in  the  fact 
that  it  is  occasionally  proven  that  the  injuries  are  intentionally 
inflicted. 

Bad  blood  develops  between  teams  and  individuals,  and  in 
the  tangle  of  the  game,  old  scores  are  wiped  out  and  new  ones 
entered  in  a  way  by  no  means  polite.  A  game  in  which  this 
is  possible,  is  inherently  defective  and  not  good  sport. 

Football  appeals  to  the  humorist  also.  Wallace  Irwin  in  the 
New  York  Glohe  of  Oct.  14,  1911,  describes  the  views  of  a  crea- 
tion of  his,  a  certain  ''Col.  Crowe  of  Cripple  Creek,"  on  foot- 
ball.    "Col.  Crowe"  has  this  to  say: 

"  'Tain't  in  it  with  bull-fightin '.  In  the  first  place  the  killin' 
is  all  too  harem  scarem  and  accidental.  There's  plenty  o' 
brutality,  but  it  ain't  played  up  so  that  the  audience  can  git 
full  benefit  of  it.  Maybe  it  wasn't  a  first  class  game  I  seen; 
but  it  seemed  to  me  I'd  a-gone  away  more  satisfied  if  more  o' 
the  injury  had  been  did  in  full  view  of  the  audience.  Time 
and  again  I  seen  'em  do  the  same  thing — all  squat  down  with 
their  heads  close  together  while  the  captain  shouted  4 — 11 — C. 
Q.D.,  thus  givin'  the  secret  signal  for  who  was  to  be  killed — 
next  y'  knew  some  young  man  was  left  for  dead  in  the  field, 


TOM,  DICK  AND  HARRY  335 

while  tliem  assassins  scampered  away  from  the  scene  o'  the 
crime  as  merry  as  kangaroo  colts.  Now,  I  ain't  raisin'  no  ob- 
jections to  murder,  if  it's  included  in  the  rules  of  the  game; 
but  as  long  as  the  audience  pays  a  dollar  to  git  in  and  twenty- 
five  cents  extra  for  the  privilege  of  carrying  a  flag,  I  claim  it's 
their  right  to  be  in  on  all  the  fun.  If  somebody's  got  to  be 
killed,  let  it  be  did  out  in  the  open  where  everybody  can  see  it. 
Though  I  ain't  got  much  use  for  a  ]\Iexican,  ordinarily  I  must 
say  they  're  lots  greater  artists  than  us  when  it  comes  to  a  public 
slaughter  house  event." 

"You  mean  you  prefer  bull-fighting  to  football?"  I  inquired, 

shocked. 

"It's  more  square  and  above  the  table,"  said  Col.   Crowe. 
"When  a  Mexican  goes  to  a  bull-fight,  he  goes  with  the  ex- 
pectation of  seein'  something  or  somebody  killed.     He's  never 
disappointed.     And  what's  more,  the  killin'  is  played  up  into 
a  big  draymatic  spectacle.     The  bull,  the  horses,  the  bull  stickers 
are  all  marched  out  to  the  music  of  a  brass  band.     The  horses 
and  five  or  six  assorted  toreadors  are  slaughtered  in  full  view 
of  the  audience,  right  under  the  grandstand.     Then  when  the 
bull  is  all  lathered  up  into  a  glorious  state  of  peevishness,  the 
chief  sticker  steps  forth  into  the  center  of  the  arena  and  they 
fight  it  out.     If  the  toreador  kills  the  bull,  the  audience  yells, 
'  Bray-vo,  toreador ! '    But  if  the  bull  kills  the  toreador,  the  audi- 
ence with  equal  enthusiasm  yells,  'Bray-vo,  bull!'     It's  a  cinch 
game.     AVhichever  way  y'  play  it  y'  git  what  y'  want — a  gory 
sacrifice." 

"Do  you  think  the  object  of  the  sport  is  a  gory  sacrifice?"  I 
asked,  more  horrified  than  before. 

"Well,  ain't  it?"  inquired  the  colonel.  "You'll  generally 
find  that  the  public  payin'  from  two  bits  to  two  dollars  for 
their  ticket,  is  goin'  to  be  disappointed  if  they  don't  see  some- 
body hurt.  Hence  sports.  The  object  of  a  bull  fight  is  to  kill 
the  bull;  the  object  of  a  football  game  is  to  kill  the  half-back; 
the  object  of  an  aviation  meet  is  to  kill  the  aviator,  the  object 
of  a  melo-dray-ma  is  to  kill  the  villain ;  the  object  of  a  baseball 
game  is  to  kill  the  umpire;  the  object  of  a  prize  fight  is  to  see 
a  400-pound  white  hope  beaten  hopeless  by  a  six-ounce  fireman 
from  Pueblo." 

A  sport  which  is  an  innocent  amusement,  compared  with  foot- 
ball when  the  number  of  fatalities  is  considered  and  one  which 
also  arouses  great  interest,  is  the  pastime  known  as  boxing. 


336  THE  PRICE  OF  INEFFICIENCY 

Boxing  at  present  is  considerably  under  the  ban.  The  fact 
that  it  is  a  brutal  and  degrading  sport  for  both  spectator  and 
participant,  has  at  no  time  been  so  clearly  recognized,  and  in 
most  states,  forms  of  it  are  illegal  if  not  entirely  forbidden. 
Newspapers  condemn  it  and  those  formerly  its  best  friends  now 
see  the  error  of  their  ways.  Persons  who  formerly  journeyed 
all  the  way  across  the  continent  to  witness  such  contests,  are  no 
longer  as  enthusiastic  as  they  were.  Boxing,  in  fact,  is  under 
a  cloud,  a  dark  cloud  as  it  were,  a  strong,  heavy  "smoke,"  and 
its  days  appear  to  be  numbered. 

Loss  of  interest  in  boxing  has,  no  doubt,  been  one  of  the  causes 
of  the  recent  enormous  favor  of  baseball,  a  sport  which  for  all 
concerned  is  the  most  interesting  and  least  dangerous  of  any 
that  has  a  great  following.  Although  an  average  of  but  8  or 
10  persons  a  year  are  killed,  their  deaths  are  rather  of  an  ac- 
cidental nature  than  the  more  or  less  necessary  outcome  of  the 
game  itself. 

Baseball  is  the  great  American  game.  It  was  evolved  in 
its  present  form,  in  the  early  part  of  the  last  century,  though 
its  rudiments  reach  back  into  antiquity.  The  excavations  and 
decipherings  recently  made  at  Boghaz-Keni,  in  Northern  Syria, 
by  Prof.  Winkle  of  Berlin  and  Prof.  Hogarth  of  London,  show 
the  game  being  played  by  Hittites,  with  gourd  masks ;  the  umpire 
being  King  Subbi-Liliman,  who  reigned  in  the  eighteenth  cen- 
tury B.  C.  Balls  and  bats  somewhat  similar  in  construction  to 
those  in  present  use  are  shown. 

Forms  of  baseball  exist  in  many  countries,  but  as  played  in 
America,  its  form  is  such  as  to  be  of  the  greatest  interest  to 
spectator  and  public.  It  is  a  game  of  great  adaptability,  and 
though  usually  played  by  teams  of  nine  on  a  side,  it  may  be 
modified  to  suit  almost  any  smaller  number  of  players,  and  as 
it  requires  no  specially  prepared  ground,  no  individual  imple- 
ments, a  single  bat  and  ball  serving  all  the  players,  and  no  spe- 
cial costumes  or  paraphernalia,  it  is  the  most  economical  game 
that  can  well  be  devised. 

It  may  be  played,  too,  at  almost  any  season  of  the  year,  ex- 
cept in  cold  weather,  and  at  any  hour  of  the  day,  while  the 
duration  of  the  game,  usually  about  two  hours,  may  be  varied 
to  suit  circumstances. 

The  players  need  have  no  particular  skill,  as  long  as  the  op- 
posing teams  are  about  evenly  matched,  and  its  demands  on 
the  players  do  not  involve  over-exertion,  since  periods  of  rest 
are  afforded  between  runs. 


TOM,  DICK  AND  HARRY  337 

For  the  spectator  the  game  is  open  and  easily  followed,  while 
interest  is  continuously  maintained  with  frequent  intensifica- 
tions. 

Baseball  brings  its  devotees  into  the  open  air,  and  it  is  a 
sport  of  almost  ideal  nature,  the  only  drawback  being  the  rather 
large  number  of  players  requisite  and  the  necessity  of  an  um- 
pire, with  frequent  altercations  over  his  decisions,  and,  in  its 
professional  forms,  of  the  over  development  of  the  part  of  the 
pitcher,  whose  skill  becomes  so  great  that  the  batter  has  great 
difficulty  in  hitting  the  ball,  and  the  game  loses  in  action,  be- 
coming merely  a  spectacle  of  the  pitcher  and  catcher  throwing 
the  ball  back  and  forth. 

Baseball  as  played  in  America  is,  at  some  time  or  other,  a 
sport  engaged  in  by  every  boy,  so  tliat  it  is  a  game  that  is 
understood  and  one  in  which,  of  the  vast  audiences  that  assem- 
ble to  view  it,  every  spectator  has  been  at  some  time  a  partici- 
pant. It  is,  however,  a  man's  game,  pure  and  simple,  as  w^omen 
take  very  little  interest  in  it,  much  less  than  football,  while 
women  with  practically  no  exceptions  do  not  play  the  game  at 
any  period  of  their  lives.  The  sudden  exertions  of  strength 
and  quickness  required  put  it  beyond  their  physical  powers. 

Yet  even  as  good  a  game  as  baseball  is  in  itself,  it  has  yet 
been  made  a  sort  of  national  nuisance  by  the  American  ten- 
dency to  overdo  a  good  thing.  The  followers  of  the  game  be- 
come so  absorbed  in  the  results  of  the  various  series  played 
between  the  clubs  of  different  cities  each  summer  season  for 
the  championship  of  the  country,  that  their  conversation  be- 
comes a  burden  to  others  not  affected  with  similar  interests. 

Such  enthusiasts  known  as  "fans"  when  unable  to  attend  the 
game  itself,  or  when  it  is  being  played  in  another  city,  congre- 
gate in  great  numbers  before  newspaper  bulletin  boards,  and 
spend  hours  watching  the  returns  from  various  parts  of  the 
country,  impeding  street  traffic,  though  otherwise  acting  in  a 
harmless  manner,  a  welcome  contrast  to  the  activities  of  those 
who  attend  football  games  and  afterwards  in  their  exuberance 
of  spirits,  wreck  theaters  and  parade  the  streets  shouting  half 
the  night,  or  more,  and  exhibiting  various  evidences  of  rowdy- 
ism. 

No  subject,  however  important,  receives  the  amount  of  pub- 
lic interest  shown  in  baseball.  If  the  fate  of  the  universe  hung 
on  the  result,  there  could  hardly  be  more  attention  paid.  Only 
on  election  nights  do  greater  crowds  collect  before  the  news- 
paper bulletins,  and  then  less  out  of  real  interest  in  the  election 


338  THE  PRICE  OF  INEFFICIENCY 

than  merely  through  general  common  consent  and  curiosity. 
To  the  baseball  enthusiast,  life  has  but  one  great  interest,  and 
beware  the  critic  of  the  game.  If  he  does  not  believe  in  base- 
ball, he  is  "not  a  true  patriot"  and  "no  good  citizen."  Ex- 
pressions of  this  kind  are  actually  used  by  intelligent  business 
men  in  defending  their  interest  in  baseball. 

And  enthusiasm  for  baseball  is  no  respecter  of  persons.  It 
seizes  on  rich  and  poor,  employer  and  employees,  capitalist  and 
office  boy  alike,  and  the  attention  given  the  subject  is  so  great 
that  practically  every  normal  citizen  is  compelled  to  take  more 
or  less  interest  in  it,  while  the  number  of  those  who  attend 
regularly  runs  into  the  millions. 

The  professional  players  receive  salaries  of  three  to  ten  thou- 
sand dollars  a  season  and  the  names  of  the  most  popular  are 
as  familiar  as  those  of  celebrated  persons  in  any  line  of  en- 
deavor, if  not  more  so.  The  players  of  the  teams  in  the  cham- 
pionship series  at  the  end  of  the  season  receive  large  sums  for 
but  a  few  games,  the  players'  share  of  four  games  of  the  1912 
series  being  $147,571,  or  from  $2,500  to  $4,000  each,  according 
to  circumstances.. 

The  amount  of  money  expended  in  admissions  to  the  game, 
the  half  days  lost  from  business  and  the  amount  of  energy  de- 
voted to  the  subject  in  reality  constitute  a  national  waste  of 
large  proportions.  The  best  that  can  be  said  of  baseball  is 
that  it  is  not  accompanied  by  gambling,  and  although  the  clubs 
are  managed  for  private  profit,  a  singular  thing  when  the  pub- 
lic nature  of  the  institution  is  considered  and  when  football  is 
quite  free  of  any  touch  of  commercialism,  it  being  run  by  the 
schools  and  colleges  and  played  strictly  by  amateur  players, 
while  baseball  is  only  played  by  professional  players  to  any 
large  monetary  returns;  it  has  remained  a  clean  sport.  Occa- 
sionally politics  gets  in  and  dirties  it  up  a  bit,  as  in  the  distri- 
bution recently  of  the  tickets  of  a  championship  series  to  specu- 
lators and  bartenders  of  a  certain  political  faith  and  the  con- 
sequent mulcting  of  the  public.  Boxing  seems  to  have  drawn 
to  itself  most  of  the  crooked  work  in  sports,  leaving  baseball 
clean. 

The  baseball  fan  is  not  noted  for  his  mental  attainments  as 
a  rule.  He  is  not  proud  of  being  a  fan,  neither  is  he  ashamed 
of  it.  He  is  so  thoroughly  a  fan  that  fannism  is  a  part  of  his 
existence  and  he  cannot  understand  the  attitude  of  the  critic. 
He  really  believes  that  something  is  wrong  with  those  uninter- 


TOM,  DICK  AND  HARRY  339 

ested  in  the  game,  or  at  least  that  they  are  not  as  perfectly 
normal  as  they  should  be. 

Baseball  enthusiasm  is  jealous,  however.  The  fan  has  no 
other  passion.  He  is  not  a  student  of  the  drama,  nor  does 
opera  arouse  him,  and  a  philanthropic  concert  is  Greek  to  him 
and  gladly  so,  for  there  is  no  excitement  to  be  found  in  them, 
and  the  excitement  of  the  contest  is  what  he  lives  for.  He  does 
not  seek  to  make  converts,  but  the  fellowship  of  the  mania  is 
the  apotheosis  of  democracy.  Well  may  the  philosopher  envy 
the  expectancy  of  the  fan  when  he  meets  another  and  they  are 
going  to  the  game,  though  he  may  be  saddened  that  so  much 
energy  is  expended  to  no  useful  purpose. 

The  ethical  aspect  of  baseball,  the  immoderate  attention  to 
a  series  of  contests  which  prove  absolutely  nothing  once  they 
are  completed,  the  vast  concern  over  a  thing  of  no  real  moment, 
is  well  treated  in  an  editorial  entitled  "The  Baseball  Craze" 
in  the  New  York  Evening  Journal,  Oct.  14,  1911,  an  influential 
newspaper  noted  for  the  moral  tone  of  its  editorials: 

"The  excitement  in  America  over  baseball  is  similar  in  char- 
acter to  the  excitement  in  Spain  over  the  bull-fight,  and  in  the 
Argentine  over  the  game  'Pelota. ' 

"It  is  not  agreeable  to  throw  cold  w^ater  on  any  kind  of 
enthusiasm.  But  the  Evening  Journal  wants  to  remind  young 
men  especially  that  it  is  extremely  harmful  to  concentrate  in- 
terest on  something  that  some  other  man  is  doing. 

"It  is  all  very  well  for  a  baseball  pitcher  or  catcher  to  con- 
centrate every  ounce  of  energy  on  the  achievement  of  some  base- 
ball deed. 

"For  that  achievement  means  his  success. 

"But  when  young  men  put  their  minds  day  after  day,  on  the 
minute  details  of  a  baseball  game,  worrying  over  the  failure 
of  this  player,  wildly  enthusiastic  over  the  success  of  another, 
that  is  a  very  bad  thing  for  the  youth  commonly  known  as  a 
'baseball  fan.' 

"If  you  are  one  of  the  hundreds  of  thousands  of  baseball 
maniacs,  remember  this: 

"It  is  quite  likely  that  twenty  years  hence  you  will  be  one 
of  the  average  failures. 

"And  it  is  quite  likely  that  some  young  man  of  your  own 
age  very  near  you  at  this  moment  will  be  one  of  the  exceptional 
successes. 

"You  will  be  one  of  the  average  failures,  because  you  will 


340  THE  PRICE  OF  INEFFICIENCY 

have  devoted  your  most  intense  concentration,  attention  and  in- 
terest to  baseball  or  something  else  that  cannot  help  you. 

"And  the  young  man  near  you,  no  better  equipped  than  you 
for  success,  perhaps,  will  pass  you  in  the  race  because  at  this 
moment  while  you  are  thinking  and  yelling  about  the  national 
series'  he  is  thinking,  studying  and  concentrating  upon  some- 
thing that  will  be  of  value  to  him  and  contribute  to  his  success 
twenty  years  from  now.  , 

"No  young  man  can  do  two  things  at  a  time  with  all  his 
energy.  You  cannot  be  a  baseball  fan  with  all  of  your  energy 
and  at  the  same  time  be  something  else. 

"No  man  ever  made  his  real  success  unless  the  most  intense 
interest  that  he  had  in  life  was  concentrated  upon  that  suc- 
cess. Don't  deceive  yourself  with  the  idea  that  you  attend  to 
your  work  very  well  and  that  the  wild  baseball  enthusiasm  does 
no  harm.  The  baseball  mania  gets  your  real  concentration  and 
your  work  gets  what  is  left,  which  is  not  much. 

' '  If  you  can  learn  to  look  at  baseball  in  the  same  way,  if  you 
can  transfer  to  your  own  work,  to  your  own  acts  and  efforts 
each  day,  the  intense  concentration  and  interest  which  you  now 
devote  to  the  ba.seball  game,  to  the  names,  acts  and  efforts  of 
uneducated,  largely  worthless  and  rather  uninteresting  pro- 
fessional baseball  players,  your  chance  of  success  in  life  will 
be  improved." 

The  enormous  energy  devoted  to  baseball  and  other  sports 
in  America,  while  not  an  active  evil  in  itself,  is  a  great  loss 
w^hen  it  is  considered  what  might  be  the  results  were  this  energy 
devoted  to  real  progress. 

Another  evidence  of  misplaced  energy  is  found  in  the  method 
of  celebrating  the  Fourth  of  July.  During  the  last  nine  years, 
some  1,719  persons  lost  their  lives  in  this  way.  The  Neio  York 
Sim  in  an  editorial,  "Elimination  of  Superfluous  Patriotism," 
on  August  30,  1911,  says: 

"It  is  only  within  the  last  five  years  that  a  serious  effort 
has  been  made  to  correct  the  abuses  in  question.  Ten  years 
ago  those  who  protested  against  them  were  treated  generally 
as  anti-patriots,  if  not  as  traitors.  But  the  majority  had  no 
notion  of  the  enormous  amount  of  injury  done,  and  did  not  stop 
to  think  of  it.  Thanks  to  the  Journal  of  the  American  Medical 
Association,  the  facts  have  been  made  so  plain  by  now  that  even 
the  hardiest  patriot  cannot  explain  them  away  or  pretend  that 
such    licentiousness   is    a   necessary   or    desirable    part    of   the 


TOM,  DICK  AND  HARRY  341 

education  of  young  Americans.  In  the  last  nine  years,  our 
boisterous  way  of  celebrating  Independence  Day  has  been  the 
cause  of  1,719  deaths  and  37,410  injuries. 

"Up  to  five  years  ago,  the  ordinary  patriot  was  apt  to  defend 
the  explosive  method  of  celebration  upon  the  same  plea  as  saner 
critics  defend  football  and  other  rough  games.  They  had  to 
admit  that  some  of  the  consequences  were  unfortunate,  but  con- 
sidering the  large  number  of  persons  engaged,  the  death  rate, 
they  argued,  was  not  after  all  very  high.  It  was  a  question, 
they  said,  whether  the  lives  lost  and  the  property  destroyed 
were  not  amply  compensated  by  the  spirit  of  patriotism  aroused 
throughout  the  country.  And  then  they  pointed  out  that  it 
was  a  gi-eat  day  for  the  boys,  and  that  we  must  not  forget  that 
we,  too,  used  to  be  young— and  so  forth. 

"But  this  sort  of  sentimentality  could  not  stand  against  the 
figures.  In  1903,  406  died  in  the  agonies  of  tetanus  as  a  result 
of  wounds  received  on  the  Fourth  of  July;  60  were  killed  out- 
right or  died  of  their  injuries,  and  4,449  were  hurt— some  of 
them  blinded,  some  suffering  the  loss  of  limb,  others  the  loss 
of  a  finger  or  two,  etc.  The  consequences  were  too  appalling 
to  be  ignored  and  at  the  last  the  more  sensible  of  the  patriots 
began  to  be  ashamed. 

"In  the  last  few  years  the  demand  for  a  safer  celebration 
has  spread  rapidly  and  we  do  not  remember  that  this  year  any 
of  the  papers  protested  against  the  regulation  of  fireworks  and 
firearms.  This  year  there  were  altogether  only  57  deaths  and 
1.603  injuries.  Eleven  of  the  deaths  and  483  of  the  injuries 
were  caused  by  firearms,  5  deaths  and  114  of  the  injuries  by 
toy  cannons,  but  most  of  the  deaths  and  most  of  the  injuries 
were  due  to  the  infamous  giant  cracker." 

The  following  table,  taken  from  the  Journal  of  the  American 
liledical  Association,  gives  the  casualties  for  the  last  nine  years : 

Yeab  Killed  Injured  Total 

1903  466  3,393  3,859 

1904  183  3,986  4,169 

1905  182  4,994  5,176 

1906  158  5,308  5,466 

1907  164  4,249  4,413 

1908  163  5,460  5,623 

1909  215  5,307  5,522 

1910  131  2,923-  3,054 

1911    57  1,603  1,660 

Total     1719  37,223  38,942 


342  THE  PKICE  OF  INEFFICIENCY 

The  victims  of  the  Fourth  of  July  celebrations  are  not  the  only 
ones  due  to  carelessness  and  folly.  The  hunter  in  America 
flourishes  as  nowhere  else.  In  Germany  the  hunter  must  take 
out  an  expensive  license  to  hunt,  and  must  then  hunt  only  over 
certain  fields,  set  forth  in  his  license.  In  America,  the  hunter 
hunts  at  his  own  sweet  will  and  the  result  was  113  deaths  dur- 
ing the  season  of  1910,  a  large  increase  over  the  usual  figures. 
In  1912,  92  were  killed;  1911,  100;  1909,  87;  1908,  57;  1907,  82 
and  in  1906,  74.  The  deaths  are  mostly  due  to  carelessness  m 
handling  of  guns,  inexperience,  and  the  mistaking  of  men  for 
deer  and  other  game.  Carelessness  is  an  outcome  of  the  thirst 
for  hunting,  a  form  of  blood  lust  so  evident  in  the  automobile 
racing  and  football  exhibitions. 

The  lack  of  restraint  and  tendency  to  violence  which  manifests 
itself  in  sports  is  exhibited  in  far  more  sinister  forms  in  the 
taking  of  human  life  in  various  ways. 

The  New  York  Evening  Sun  in  an  editorial  August  16,  1912, 

states : 

"According  to  the  American  Prison  Association's  committee 
on  criminal  procedure,  homicidal  crime  in  the  United  States 
has  increased  450%  since  1889,  and  the  ratio  of  convictions  is 
less  than  10%. 

"In  Germany  the  ratio  of  convictions  is  95%.  Homicidal 
crime  in  the  United  States,  according  to  the  same  authority, 
exceeds  the  total  of  that  of  any  ten  civilized  nations  outside  of 
Russia. 

' '  Nearly  thirty  persons  are  murdered  every  day  in  the  United 
States,  not  including  Alaska  and  the  island  dependencies.  Not 
one  out  of  four  murderers  is  brought  to  trial,  and  out  of  twenty- 
five  brought  to  trial  only  one  receives  a  death  sentence.  Ten 
thousand  homicide  crimes  are  committed  in  the  United  States 
each  year. 

"In  Chicago  alone,  in  1909,  118  homicide  crimes  were  com- 
mitted ;  for  the  same  time  in  London  20  of  the  same  kind  of 
crimes  were  committed,  and  London  is  four  times  the  size  of 
Chicago.  New  York  City  last  year  had  119  cases  of  homicide. 
These  figures  are  appalling  and  call  for  a  close  searching  of 
hearts  by  the  American  people. 

"We  are  no  less  civilized  than  European  nations.  What  then 
underlies  this  terrible  discrepancy  in  crimes  involving  human 
life? 

"One   cause,   undoubtedly,   is  the  more  general   practice   of 


TOM,  DICK  AND  HARRY  343 

carrying  firearms,  and  the  greater  license  in  this  respect 
permitted  everywhere  in  the  United  States  as  compared  with 
European  peoples.  Local  laws,  such  as  those  now  in  effect 
in  New  York  state,  against  bearing  deadly  weapons,  have 
not  the  full  backing  of  public  and  private  opinion.  This 
state  of  opinion  has  led  to  laxity  in  the  enforcement  of  the 
law. 

"From  the  earliest  times  Americans  were  accustomed  to  have 
and  bear  arms  openly;  in  fact,  the  right  'to  have  and  bear 
arms'  is  set  down  in  the  Constitution  of  the  United  States  as 
one  of  the  inherent  rights  of  the  people.  It  was  considered 
one  of  the  necessary  protections  in  a  new  and  unsettled  country. 
It  did  not  refer,  of  course,  to  any  right  of  private  vengeance, 
but  rather  enumerated  an  ancient  privilege  that  had  never  been 
questioned. 

"The  conditions  of  other  countries  in  this  respect  was  radi- 
cally different.  Feudalism,  for  instance,  minutely  prescribed 
the  classes  who  could  bear  arms,  and  named  the  kind  of  arms. 
The  selling  of  arms  to  the  general  population  of  other  countries 
has  been  jealously  guarded  by  governments." 

The  carrying  of  firearms,  however,  is  but  a  superficial  indi- 
cation of  graver  underlying  causes.  No  man  shoots  to  kill  an- 
other, no  matter  how  many  revolvers  he  has  at  hand,  unless 
there  is  in  his  heart  an  uncontrolled  disregard  of  human  life 
and  disrespect  of  law.  The  knowledge  that  so  few  murderers 
are  punished  produces  the  disrespect  and  consequent  absence 
of  fear  of  the  law,  w^hile  lack  of  training  in  school  and  at  the 
home,  absence,  in  short,  of  civilizing  influence,  is  largely  at  fault 
for  disrespect  of  human  life.  Our  school  system  while  teaching 
much  arithmetic  and  geography  teaches  but  little  respect  for  the 
rights  or  even  the  lives  of  others. 

A  thoroughgoing  tightening  of  the  bands  of  discipline  is 
needed  all  along  the  line,  and  the  inculcation  of  respect  for  the 
law  in  those  Avho  make  the  law  and  in  those  who  obej-'  the  law. 
Disrespect  for  the  law  starts  with  legislators  who  enact  foolish 
and  impossible  laws,  it  exhibits  itself  in  executives  who  connive 
at  violations  of  the  law  and  recklessly  pardon  criminals  in  great 
numbers,  and  it  continues  in  the  citizens  who  evade  and  violate 
the  law  for  personal  advantage  and  gratification.  The  law,  how- 
ever, can  rise  no  higher  than  its  source  and  its  source  is  the 
people.  Respect  for  law  and  safety  lies  in  education  and  in 
the  creation  and  enforcement  of  a  healthy  public  opinion,  of  the 


344  THE  PRICE  OF  INEFFICIENCY 

enforcement  of  the  will  of  those  who  are  sound  against  the  will 
of  those  who  are  unsound. 

Another  form  of  what  amounts  to  depravity  is  found  in  the 
numerous  Ivnchings  which  occur  throughout  the  United  States. 
While  lynching  is  not  an  organized  crime  and  while  there  are 
no  habitual  lynchers,  its  frequency  over  all  parts  of  the  country 
show  a  primitive  respect  for  law  and  order,  to  say  the  least. 
In  recent  years  the  ferocity  of  lynching  has  increased  and  burn- 
ings at  the  stake  and  unspeakable  mutilations  take  place. 

A  table  for  the  sixteen  years  from  1884  to  1900  shows  the  num- 
ber of  lynchings  to  have  been  2,516.  Of  these,  2,080  were  in 
the  southern  states  and  436  in  the  north.  The  proportion  be- 
tween blacks  and  whites  was  as  two  to  one,  1,678  being  negroes 
and  801  white  men. 

The  proportion  of  black  men  is  rapidly  rising,  however, 
which  is  accounted  for  by  the  fact  that  lynchings  of  white  men 
for  horse  and  cattle  stealing  in  the  west  were  formerly  more 
common  than  they  are  to-day.  Of  the  2,516  lynched,  in  the 
years  mentioned,  2,465  \dctims  were  men  and  51  were  women. 

A  list  of  the  causes  of  lynching  in  the  sixteen  years  mentioned 
is  very  interesting.  It  shows  a  range  all  the  way  from  throw- 
ing a  stone  and  eloping  with  a  girl  to  murder  and  assault.  The 
principal  causes  are  divided  as  foUows: 

]\rurder,  980 ;  attempted  murder,  24 ;  alleged  murder,  28 ;  rob- 
bery and  murder,  8 ;  assault  and  murder,  6 ;  suspected  of  mur- 
der, 18;  assault,  514;  attempted  assault,  77;  alleged  assault,  22; 
horse  stealing,  115;  cattle  stealing,  22;  unknown  cause,  92;  no 
cause,  10;  race  prejudice,  49;  by  whitecaps,  9;  by  vigilantes, 
14;  living  with  white  woman,  1;  enticing  away  servant  girl,  1; 
bad  reputation,  8;  unpopularity,  3;  arson,  93;  robbery,  38;  out- 
lawry, 48;  keeping  saloon,  3;  and  voodooism,  2.  Altogether, 
112  motives  are  assigned  for  the  overriding  of  the  law  by  the 
wrath  of  the  mobs.  Several  men  were  lynched  for  writing 
letters  to  white  women,  one  for  asking  a  white  girl  to  marry 
him  and  several  for  quarrels  with  white  men. 

There  has  been,  however,  a  decrease  in  the  crime,  for  in  the 
ten  years  from  1900  to  1910,  the  number  of  lynchings  was  only 
904. 

It  is  a  crime,  however,  which  is  a  direct  outcome  of  govern- 
mental inefficiency,  and  the  distrust  of  seeing  the  law  adminis- 
tered with  celerity  and  dispatch  is  the  direct  incentive  to  mob 
law. 


TOM,  DICK  AND  HARRY  345 

There  appears  to  be,  however,  running  through  civilization 
in  America,  a  strain  of  ferocity,  which  may  be  an  effect  derived 
in  some  ^\ay  from  the  climate  or  configuration  of  the  land  or  its 
substance.  The  Indians  preceding  white  men,  seemed  to  have 
a  ferocity  greater  than  that  of  other  savage  races  in  other  parts 
of  the  world,  and  though  mostly  good  natured,  the  Americans 
are  subject  to  sudden  strokes  of  vengeance  and  retribution  which 
the  barbarities  of  Russia  and  the  cruelties  of  the  Spanish  inqui- 
sition do  not  surpass.  This  extends  even  to  legal  punishments, 
and  there  are  in  force  laws  in  certain  of  the  American  states 
in  reference  to  the  sterilization  of  certain  classes  of  convicts 
which  are  of  such  shameful  and  horrible  nature  that  it  is  incon- 
ceivable to  really  civilized  men  how  such  laws  could  have  re- 
ceived any  consideration  at  all,  much  less  being  put  in  force, 
by  legislatures  of  white  men.  Nothing  more  fiendish  than  these 
laws  can  well  be  imagined,  yet  they  have  been  enacted  in  a  num- 
ber of  states,  among  which  New  York  and  New  Jersey  are  the 
most  recent  recruits.  The  public  is  probably  too  little  aware  of 
the  monstrous  legal  barbarity,  which,  however,  has  had  the  sanc- 
tion of  the  Supreme  Court  of  the  United  States,  it  being  de- 
clared within  the  police  powers  of  the  states  to  perform  such 
mutilations. 


CHAPTER  XXII 
CUTTING  OUT  THE  MIDDLEMAN 

How  the  middleman  robs  the  isolated  customer — The  greatest  crime  of  mod- 
ern times — How  combatted  abroad  by  consumers'  unions — How  great 
organizations  of  consumers  reduce  prices — Why  such  organizations  are 
lacking  in  the  United  States — How  they  may  be  established — Ex- 
travagant characteristics  of  Americans — Boasted  lack  of  culinary  skill 
on  the  part  of  American  women — Poor  household  management — Why 
matrimony  fails  to  cope  with  modern  conditions — Spending  a  dollar 
like  a  millionaire — Thorough  schooling  of  the  European  housewife — 
Compliments  at  meal  times — How  consumers'  unions  are  organized 
abroad — Over  2,000  branches  in  the  German  union — 'The  curse  of  soup 
in  cans — Operation  of  consumers'  union — ^The  bulletin  and  its  con- 
tents— How  orders  are  placed — Advance  orders — Arrangement  and 
business  methods  of  a  consumers'  union  store — Pre-Christmas  dividend 
— Removals — Courtesy  and  equal  service — How  such  unions  may  be 
established  in  the  United  States — Starting  one  in  a  small  way — Con- 
sumers' clubs  and  discounts — System  of  brass  money — How  prices 
could  be  reduced — Present  tax  on  cash  purchaser  eliminated — ^Why  the 
ten  cent  stores  can  sell  so  cheaply — How  to  save  high  rents  of  stores 
— A  new  purchasing  system — Supply  depot  for  staples — A  complete 
store  with  discounts  to  members — Incentives  to  club  managers — Small 
clubs  of  consumers  managed  by  women  as  a  new  occupation — Com- 
munal kitchens — Ethical  effect  of  reduction  of  cost  of  living  so  ef- 
fected— Political  significance  of  consumers'  organizations — The  start- 
ling extent  of  the  extortion  of  the  middleman. 

Perhaps  the  most  conspicuous  example  of  the  lack  of  inter- 
est which  the  American  public  takes  in  its  own  affairs  as  com- 
pared with  the  European  public,  is  in  the  absence  of  consumers' 
unions  or  purchasing  organizations,  which  so  materially  reduce 
the  cost  of  living  to  their  members,  particularly  in  England, 
Germany  and  Switzerland. 

The  collective  action  of  such  groups,  the  cohesion  and  interest 
taken  by  their  members  in  them,  is  wholly  lacking  in  America, 
where  the  organized  body  of  middlemen  has  taken  advantage 
of  conditions  and  obtained  such  a  power  and  dominance  that 
the  prices  of  commodities  have  risen  to  the  levels  of  extortion. 

Consumers'  unions  in  the  countries  mentioned  have  grown 
to  great  proportions,  and  have  proved  of  enormous  public  serv- 

346 


CUTTING  OUT  THE  MIDDLEMAN  347 

ice.  The  bitter  opposition  which  they  have  encountered  from 
tradesmen  goes  to  prove  their  great  value. 

It  will  be  interesting  to  point  out  the  essentials  of  the  organi- 
zation of  consumers'  unions  and  to  indicate  how  they  may  be 
established  in  the  United  States,  both  on  a  large  and  small  scale, 
in  the  latter  case  by  women  of  even  ordinary  business  ability. 

There  are  a  number  of  important  reasons  for  the  existence 
of  consumers'  unions  abroad,  which  do  not  obtain  in  the  United 
States  at  present.  Abroad  there  is  a  greater  tendency  to  or- 
ganize and  support  active  co-operative  societies  of  all  kinds. 
This  is  characteristic  of  a  more  mature  civilization  than  pre- 
vails in  America  and  is  also  perhaps  a  characteristic  of  Euro- 
pean peoples,  Americans  being  of  a  more  individualistic  nature. 

The  American  also  looks  less  closely  at  his  small  expenditures. 
He  spends  his  nickels  and  dimes  like  water,  buys  a  lot  of  news- 
papers, cigars  and  knickknacks  and  then  economizes  with  a 
shoddy  overcoat.  The  European  looks  more  carefully  to  the 
small  daily  expenses  which,  though  slight  in  themselves,  yet 
which  in  the  course  of  a  year  aggregate  so  much,  and  thus  he  is 
able  to  afford  a  larger  outlay  for  the  few  items  of  considerable 
expense  which  occasionally  arise. 

A  further  reason  for  the  absence  in  the  United  States  of  such 
consumers'  unions  is  in  the  attitude  which  the  American  woman 
takes  toward  her  kitchen,  as  compared  to  that  taken  by  the 
man  abroad.  With  large  numbers  of  American  women,  it  is  a 
frequent  boast  that  they  do  not  know  how  to  cook  a  meal,  or  have 
no  idea  how  certain  dishes  are  prepared,  or  do  not  know,  in 
some  cases,  how  to  make  a  cup  of  coffee.  Of  this  lack  of  culi- 
nary skill  they  show  considerable  pride,  and  they  do  not  hesitate 
to  air  their  ignorance.  The  American  woman,  doubtless,  in 
thus  showing  her  contempt  for  the  kitchen,  imagines  that  she  is 
proving  herself  to  be  on  a  higher  plane  in  the  social  scale  than 
her  sister  who  knows  the  mysteries  of  the  preparation  of  food. 
It  would  not,  however,  appear  to  be  unbecoming  even  in  the 
mistress  of  a  Fifth  Avenue  mansion,  to  be  reasonably  well  ac- 
quainted with  the  methods  of  food  preparation,  and  no  one 
would  feel  that  such  a  woman  would  be  demeaned  by  knowing 
how  properly  to  direct  her  servants  in  preparing  the  food  for 
her  family. 

For  the  American  woman  of  lesser  advantages  to  eschew  such 
knowledge,  is  likely  to  be  an  affectation  or  the  result  of  indo- 
lence.    Yet  it  is  evident  that  American  women  are  not  well 


348  THE  PRICE  OF  INEFFICIENCY 

trained  in  household  management.  They  regard  it^  as  an  in- 
ferior science  and  as  undeserving  of  their  best  attention,  where- 
as the  art  of  housekeeping  is  one  that  is  of  the  first  importance 
in  the  economy  of  national  life. 

The  American  woman  is  not  good  at  purchasing  supplies. 
The  idea  of  going  to  market  in  the  early  morning  hours  is  far 
from  her  idea  of  her  mission  on  this  temporary  sphere.  It  suits 
her  much  better  to  take  her  coffee  in  bed  and  serve  canned 
beans  for  dinner  and  to  devote  her  leisure  moments  to  suffraget- 
ting  and  writing  essays  as  to  why  matrimony  proves  inadequate 
to  cope  with  modem  conditions. 

It  is  never  the  boast  of  an  American  housewife  to  her  guests 
that  a  meal  has  cost  less  than  a  certain  sum  to  prepare,  or  that 
she  has  run  her  table  within  the  week  at  a  certain  low  figure. 
If  anything,  she  is  more  than  anxious  to  say  how  great  the  cost  of 
the  meal  has  been,  and  how  expensive  certain  of  its  dishes.  This 
is  due,  in  a  certain  measure,  perhaps,  to  the  spirit  of  hospitality, 
but  more  to  the  spirit  of  spending  a  dollar  largely,  and  in  the 
grand  manner  of  the  millionaire. 

Conditions  that  now  exist  are  a  sufficient  answer  to  this  sys- 
tem of  housekeeping,  a  system  perhaps  the  most  inefficient  that 
could  well  be  devised.  Abroad,  the  mistress  of  the  house  is 
thoroughly  schooled  in  all  the  arts  of  domestic  economy,  and  it 
is  a  matter  of  pride  with  her,  to  know  how  to  prepare  a  cup  of 
coffee,  as  well  as  more  complicated  dishes.  She  is  likely  before 
a  friend  who  is  a  guest  to  boast  how  little  the  meal  just  finished 
has  cost,  and  this  does  not  show  lack  of  hospitality,  but  is  proof 
of  the  skill  and  thrift  of  the  hostess,  good  evidence  of  which  has 
just  been  despatched.  It  shows  that  much  pains  has  been  taken 
though  no  great  expense  has  been  gone  to. 

It  is  customary  in  America  to  compliment  the  hostess  on  the 
delicious  quality  of  the  meal,  whether  it  is  in  reality  delicious 
or  only  an  assortment  of  snacks.  This  is  a  form  of  politeness 
which  does  not  prevail  abroad,  where  the  housewife  would  re- 
sent such  elaborate  compliments,  in  much  the  same  way  that  an 
American  woman  would  the  customai-y  German  salute  of  lifting 
the  hat  so  low  that  it  is  upside  down.  It  would  seem  to  her  to 
be  over  done.  On  the  continent,  the  principal  compliment  paid 
the  hostess  is  in  refraining  from  using  pepper  and  salt,  at  least 
openly,  as  such  a  use  of  condiments  she  takes  as  a  criticism  of 
her  ability  to  properly  season  the  food. 
Many  American  women,  will,  however,  boast  of  the  excellent 


CUTTING  OUT  THE  MIDDLELIAN  349 

results  they  have  obtained  with  small  expense  in  the  way  of 
clothes,  and  it  is  in  this  same  spirit  that  the  woman  abroad 
speaks  of  her  table  expenses. 

The  lack  of  proper  interest  in  the  table  is  one  of  the  chief 
causes  of  high  prices  of  living,  as  the  failure  to  utilize  in  an 
appetizing  way,  the  cheaper  but  equally  wholesome  and  appe- 
tizing foods,  creates  a  demand  for  the  more  costly  grades,  which 
forces  them  to  still  higher  levels. 

The  ignorance  of  American  women  in  the  art  of  food  prepara- 
tion, causes  them  to  resort  constantly  to  canned  preparations, 
M'hich  though  convenient,  are  both  costly  and  unwholesome  and 
a  grave  injury  to  the  health  of  any  family  in  which  they  are 
consumed  to  any  extent.  To  cure  the  evils  thus  arising,  we 
transform  ourselves  into  a  nation  of  pill  eaters,  and  drug  stores 
are  among  the  most  profitable  and  numerous  of  all  American 
industries. 

American  ignorance  of  food  preparation,  caused  Thomas  A. 
Edison,  the  noted  inventor,  to  say  that  the  French  could  live 
on  the  foods  that  we  waste.  Mr.  Edison  was  particularly  de- 
lighted with  the  bread  which  he  found  abroad,  which  is  due  to 
the  skill  of  the  housewife  and  baker. 

The  French  housekeeper,  understanding  the  art  of  food  prep- 
aration thoroughly,  is  able  to  combine  ingredients  in  such  a 
manner  as  to  produce  wholesome  and  appetizing  dishes  from 
materials  which  used  singly  have  little  culinary  interest.  The 
American  woman  if  she  knew  how  to  make  good  dishes,  would 
take  pride  in  preparing  them,  and  would  find  them  for  herself 
as  well  as  for  her  family,  tasty  and  healthful;  but  not  knowing 
how  to  prepare  them,  she  remains  in  blissful  ignorance  and 
really  believes  the  advertisements  so  glaringly  displayed  of  the 
tastiness  of  canned  goods. 

American  women  must  take  a  greater  interest  in  cooking,  not 
only  for  its  own  sake,  but  for  the  good  of  society.  Constantly 
increasing  prices  have  made  it  necessary  for  her  to  turn  her 
attention  towards  the  kitchen,  if  she  is  to  have  any  money  left 
to  buy  rugs  and  phonographs  for  the  parlor;  and  the  operation 
of  consumers'  unions  ofEers  one  of  the  simplest  and  most  im- 
mediately applicable  expedients  for  cutting  down  the  cost  of 
living. 

Such  consumers'  unions  operate  on  a  most  extended  scale  in 
Europe.  In  Germany,  there  is  a  central  union  with  over  2,000 
branches.     There   are   also  renting  unions,   for  protecting  the 


350  THE  PRICE  OF  INEFFICIENCY 

interests  of  tenants  against  house  owners  and  landlords,  while 
there  are  a  large  number  of  building  and  loan  societies  and 
credit  unions  along  the  same  lines. 

The  local  members  of  a  consumers'  union  pay  annual  dues  of 
about  five  dollars.  The  members  at  their  annual  meeting  elect 
directors  and  officers  to  carry  on  the  work.  The  officers  may 
only  act  in  a  supervisory  capacity  over  paid  employees,  or  they 
may  act  as  managers,  making  it  their  whole  business  and  re- 
ceiving suitable  salaries  for  the  work.  The  members  also  hold 
montlily  meetings,  and  discuss  the  work  of  the  officers  of  the 
union,  market  prices,  methods  and  complaints. 

The  central  body  of  the  unions  issues  a  weekly  bulletin,  or 
newspaper,  which  is  a  quite  important  phase  of  the  movement. 
It  gives  the  market  prices,  general  news  of  interest  to  members, 
discussions  and  reports  of  the  work  of  the  various  local  unions 
comparing  their  methods  and  showing  how  improvements  may 
be  made.  Numerous  cooking  receipts  are  given  of  a  timely  na- 
ture, showing  how  to  utilize  the  foods  in  season  at  such  times 
to  the  best  advantage.  It  also  gives  information  as  to  the  con- 
dition of  crops  and  indicates  which  foods  are  likely  to  be  plenti- 
ful and  which  scarce  later  in  the  season.  It  tells  the  proper 
time  for  placing  orders  for  foods  and  supplies  so  that  the  con- 
sumer may  order  at  the  most  favorable  moment.  Not  only  the 
current  prices  are  given,  but  also  the  probable  prices  at  later 
periods  of  the  year,  based  on  the  supplies  in  sight  and  the  nat- 
ural increase  and  decrease.  This  enables  the  consumer  to 
determine  whether  to  lay  in  supplies  or  wait  until  conditions 
change.  It  acts  as  an  incentive  to  careful  management  and 
keeps  the  consumer  constantly  informed  on  subjects  that  he 
would  ordinarily  fail  to  give  proper  attention  to. 

The  placing  of  orders  by  members  at  the  proper  time  facili- 
tates the  work  of  the  unions  since  it  enables  them  to  gauge  the 
probable  demand  of  their  members  and  to  place  orders  for  the 
required  amounts;  thus  saving  any  risk  of  over  or  under  supply. 

The  unions  knowing  what  the  requirements  of  their  members 
will  be,  are  able  to  place  orders  at  any  time  for  certain  amounts 
of  various  commodities,  to  be  delivered  later  in  stated  quan- 
tities at  stated  intervals  and  agreed  prices.  Thus  the  consumer 
knows  in  advance  what  he  will  have  to  pay  and  when  he  will 
have  to  pay  it. 

A  characteristic  consumers'  union  store  often  consists  of  a 
large  one-story  building  of  the  character  of  a  market  house, 


CUTTING  OUT  THE  MIDDLEMAN  351 

with  a  large  open  space  in  the  center.  Around  the  sides  are 
arranged  various  counters,  devoted  each  to  a  separate  class  of 
commodities,  a  counter  for  meats,  one  for  rice,  flour,  etc.,  an- 
other for  fruits,  another  for  vegetables,  another  for  wines  and 
liquors  and  others  for  clothing  and  haberdashery,  as  the  con- 
sumers' unions  include  also  wearing  apparel  as  well  as  foods 
and  household  commodities.  Even  bicycles  and  hardware, 
dishes,  cutlery  and  kitchen  utensils  are  included. 

The  consumers'  unions  are  particularly  popular  with  the 
working  classes,  though  by  no  means  confined  to  them.  Since 
to  become  a  member  only  involves  the  payment  of  the  initiation 
fee,  which  is  small,  most  of  the  families  living  in  a  neighbor- 
hood where  there  is  a  consumers'  union  store  will  become  mem- 
bers of  it.  As  there  are  many  branches,  a  move  only  means  the 
transfer  from  one  branch  to  another  of  the  same  general  union, 
without  paying  a  new  initiation  fee. 

It  is  customary,  early  in  December,  for  the  consumers'  unions 
to  declare  a  rebate  or  dividend  out  of  the  profits  of  the  year, 
and  this  is  the  measure  of  the  efficiency  of  the  organization.  It 
is  given  at  that  time  in  order  that  the  members  may  have  the 
money  to  utilize  for  Christmas  purchases.  The  distribution  is 
in  accordance  with  the  volume  of  purchases  of  the  individual 
members.  Track  is  kept  of  this  in  the  method  of  making  pur- 
chases, as  each  member  is  provided  with  a  small  book  which  is 
taken  to  the  store  whenever  a  purchase  is  made.  The  salesman 
marks  the  amount  of  the  purchase  in  the  book  and  this  forms 
the  record  on  which,  at  the  end  of  the  year,  the  amount  of  the 
customer's  rebate  is  figured.  The  larger  his  purchases  the 
larger  will  be  the  amount  of  his  rebate,  although  the  rate  of  it 
will  be  the  same  as  the  rate  of  a  smaller  consumer. 

During  the  year,  should  the  consumer  remove  to  another  part 
of  the  country,  the  same  purchasing  book  may  still  be  used. 
Members  are  also  privileged,  when  there  are  different  stores  in 
the  same  city,  to  purchase  at  will  from  any  of  them  with  the 
same  book.  As  the  clientele  of  each  store  varies  with  its  loca- 
tion, some  having  goods  of  a  higher  quality  than  others,  con- 
siderable advantage  may  be  taken  of  these  differences. 

As  the  local  unions  work  in  conjunction  with  the  credit 
unions,  the  consumers  may  in  this  way  obtain  a  certain  amount 
of  credit. 

An  interesting  feature  of  the  stores  is  that  all  the  members 
have  the  same  treatment  in  the  selection  of  goods.     The  largest 


352  THE  PRICE  OF  INEFFICIENCY 

apples  do  not  appear  at  the  top  of  the  barrel,  nor  are  the  goods 
picked  over.  Each  purchaser  takes  the  regular  run  of  goods, 
and  no  one  is  shown  any  special  favors,  nor  is  any  extra  meas- 
ure given.  The  consumer,  indeed,  being  in  effect  a  part  pro- 
prietor of  the  store,  would  be  the  first  to  object  to  too  full  a 
measure  since  he  would  reflect  that  others  were  probably  receiv- 
ing the  same  if  not  greater  favors.  There  is  thus  no  bargaining 
between  clerks  and  customers  and  the  business  is  transacted  with 
the  least  delay  and  annoyance.  Indeed,  a  child  may  be  sent  to 
market  with  the  assurance  that  just  as  good  results  will  be 
obtained  as  would  be  by  an  adult,  and  in  the  same  way,  tele- 
phone orders  may  be  given  with  equal  confidence.  This  is  a 
considerable  relief  to  the  German  purchaser,  who  ordinarily  takes 
particular  care  in  the  inspection  of  his  purchases,  often  in 
butcher  shops  even  selecting  the  meat  and  seeing  the  chopping 
performed  before  his  own  eyes,  when  his  mouth  waters  for  a 
Hamburger  steak. 

Among  the  methods  whereby  the  system  of  consumers' 
unions  could  be  introduced  in  the  United  States,  several  have 
considerable  value.  Only  experience,  however,  will  demonstrate 
which  are  the  most  feasible  and  best  adapted  to  succeed  under 
the  conditions  of  American  life,  character  and  customs.  It  is 
ob^^ous,  of  course,  that  no  large  system  could  at  once  be  intro- 
duced with  branches  all  over  the  country,  so  that  it  is  essential 
to  begin  the  plan  in  some  small  way.  The  method  which  finally 
becomes  the  one  most  followed  will  have  to  be  the  one  that  ap- 
peals most  strongly  to  many  different  people  in  different  local- 
ities, and  one  which  excites  the  initiative  of  the  members  and 
causes  them  to  institute  it  in  a  more  or  less  spontaneous  manner. 
There  can  be  no  doubt  that  consumers'  unions  will  soon  appear 
in  the  United  States.  They  are  an  absolutely  necessary  ex- 
pedient for  cutting  down  the  cost  of  living,  and  the  only  ques- 
tion is  what  plan  will  prove  most  adaptable. 

One  form  of  consumers'  union  may  be  put  in  operation  very 
readily.  It  involves  the  formation  of  a  consumers'  club  and 
the  co-operation  of  certain  dealers  in  a  neighborhood,  a  grocer, 
a  baker  and  a  butcher.  Later  a  delicatessen  and  a  drug  store 
would  be  added.  The  club  being  formed,  the  initiation  fees 
would  serve  to  defray  the  cost  of  a  supply  of  brass  checks,  serv- 
ing as  the  coinage  of  the  club,  and  the  members  would  obtain, 
for  example,  eleven  dollars  worth  of  checks  from  the  club  for 
ten  dollars  in  money.     Used  by  the  members,  such  checks  would 


CUTTING  OUT  THE  MIDDLEMAN  353 

be  accepted  by  the  stores,  and  at  the  end  of  each  business  day, 
the  stores  presenting  the  checks  they  had  accepted  during  the 
day  from  the  members  to  the  club  treasurer,  would  receive  the 
agreed  value  in  cash. 

The  benefit  to  the  members  in  such  a  plan  would  be  that  they 
would  obtain  a  10%  reduction  in  the  cost  of  their  goods,  while 
the  stores  would  be  enabled  to  take  trade  away  from  rival  deal- 
ers, and  being  assured  of  the  patronage  of  the  club,  would  gain 
as  much  at  the  end  of  the  year,  through  a  larger  volume  of  busi- 
ness at  a  lower  profit  as  they  would  under  the  previous  state 
of  open  competition.  They  would  also  be  doing  a  cash  business. 
The  effect  of  this  plan  is  to  reduce  the  profits  of  the  stores  not 
in  the  union,  or  even  to  wipe  them  out  entirely,  in  which  case 
a  neighborhood  which  was  first  served  by  a  large  number  of 
stores,  without  increasing  its  purchases,  comes  to  be  served  by  a 
fewer  number  of  stores.  Thus  the  cost  of  distribution,  which 
is  the  only  proper  cost  of  the  middleman,  is  reduced  by  wiping 
out  superfluous  stores. 

Should  any  of  the  stores  patronized  fail  to  supply  the  quality 
of  goods  desired,  the  club  could  readily  transfer  its  members  to 
another  store.  This  would  prevent  any  deterioration  in  quality 
or  service.  The  brass  checks  being  a  cash  transaction  would 
not  only  be  to  the  dealer's  advantage,  but  would  be  to  the  ad- 
vantage of  the  cash  customer,  who  under  the  present  system 
must  pay  as  much  for  his  goods  as  the  purchaser  who  obtains 
his  goods  on  credit,  and  often  never  pays. 

An  additional  cheapness  would  result  should  the  grocer  be 
relieved  of  the  cost  of  deliveries,  which  is  an  item  that  raises  the 
price  to  the  consumer. 

A  noticeable  example  of  the  saving  to  customers  due  to  cash 
business,  sales  without  deliveries  and  freedom  from  bookkeep- 
ing expense  and  collections  is  seen  in  the  great  values  given  by 
ten  cent  stores.  The  application  of  the  club  check  system  just 
described  would  give  the  members  a  grocery,  bakery  and  butcher 
shop  utilizing  the  principles  of  the  ten  cent  store  plan.  Stores 
patronized  by  the  club  would  also  have  no  need  to  advertise, 
another  important  saving. 

Such  stores  could  also  be  located  in  much  less  prominent  and 
expensive  places,  saving  high  rents  now  paid  for  positions  of 
advantage.  The  public  would  in  this  way  effect  great  savings 
for  itself,  as  owing  to  its  carelessness  as  to  where  it  makes  its 
purchases  and  its  tendency  to  save  a  few  steps  and  drop  into 


354  THE  PRICE  OF  INEFFICIENCY 

the  avenue  store  instead  of  going  around  the  corner  to  the  street 
store  up  the  block,  places  a  high,  fictitious  and  altogether  un- 
necessary value  on  real  estate,  the  rent  of  which  eventually 
comes  out  of  its  own  pocket  in  the  costs  of  the  articles  it  buys. 

Prices  are  the  greatest  of  commercial  magnets.  Department 
stores  through  lower  prices  draw  patrons  from  distant  parts  of 
the  citv  and  even  adjoining  cities,  who  would  otherwise  pur- 
chase nearer  home  if  not  tempted  to  take  the  journey  by  the 
lower  prices  offered.  Members  of  a  consumers'  club  could  be 
depended  on  to  go  even  considerable  distances  to  take  advan- 
tage of  their  brass  money. 

A  somewhat  different  form  of  organization  could  be  effected 
by  bringing  together  the  proprietors  of  a  number  of  boarding 
houses  and  restaurants,  and  establishing  a  central  depot  in 
charge  of  a  purchasing  agent.  At  the  close  of  each  day's  busi- 
ness, the  members  would  put  their  orders  in  for  the  next  day's 
supplies,  and  the  purchasing  agent  would  then  visit  the  princi- 
pal markets  of  the  city  and  procure  the  supplies  in  bulk  for 
delivery  to  the  depot,  thus  securing  wholesale  prices.  For 
staple  articles  the  orders  would  be  placed  somewhat  in  advance, 
which  would  enable  the  purchasing  agent  to  act  as  a  commis- 
sion merchant  in  placing  orders  direct  with  farmers.  Antici- 
pating to  a  certain  extent,  the  needs  of  the  members,  the  depot 
would  carry  in  stock  certain  staple  lines  of  goods  which  could 
be  drawn  upon  at  will  by  the  members.  Starting  in  this  man- 
ner, the  club  could  readily  be  extended  to  include  the  smaller 
purchases  of  householders,  and  the  depot  could  be  enlarged  and 
provided  with  a  more  complete  line  of  goods  until  it  came  regu- 
larly into  competition  with  stores  of  a  similar  character. 

The  advantage  of  this  plan  is  that  the  purchasing  agent  would 
be  free  to  buy  where  he  found  the  best  prices,  and  would  be 
able  to  take  advantage  of  any  special  inducements  of  sellers. 
"Working  on  a  cash  basis,  the  purchasing  agent  would  be  able  to 
secure  the  lowest  prices. 

A  certain  leeway  should  be  given  the  purchasing  agent,  as  to 
the  times  of  purchasing  certain  articles,  in  order  to  obtain  the 
best  terms  and  he  should  be  allowed  to  purchase  at  his  discre- 
tion goods  of  any  character,  when  particular  bargains  were 
offered. 

The  depot  could  be  made  to  serve  as  an  afternoon  market  for 
special  articles  at  special  prices,  open  to  the  members  and  to 
the  public  as  well,  but  the  members  would  be  entitled  to  certain 


CUTTING  OUT  THE  MIDDLEMAN  355 

discounts  not  allowed  the  general  public,  although  the  prices  to 
the  latter  would  be  considerably  lower  than  regular  commercial 
prices. 

A  considerable  factor  in  the  success  of  the  plan  would  lie  in 
the  energy,  experience  and  business  ability  of  the  purchasing 
agent,  who  should  be  given  a  good  salary  and  a  commission,  as 
an  incentive  to  him  to  build  up  the  business  of  the  club.  It 
should  not  be  difficult  to  secure  competent  men,  as  the  club 
would  furnish  the  working  capital  in  the  form  of  dues  and 
cash  payments  and  the  manager  of  a  large  club  would  gain  for 
himself  greater  profits  without  the  risk  of  any  capital  than  he 
would  as  a  dealer  with  his  own  money  invested  in  his  business. 
He  would  thus  be  commercially  the  superior  of  any  of  the  deal- 
ers with  whom  he  came  in  contact,  and  consequently  would  not 
be  placed  at  a  disadvantage. 

Consumers'  clubs  could  also  be  organized  on  a  smaller  scale 
even  with  only  five  or  six  members.  The  purchasing  agent  in 
such  a  case  could  make  two  calls  daily  if  necessary  on  the  mem- 
bers, a  morning  call  for  the  orders  for  the  main  produce  sup- 
plies of  the  day,  and  a  later  call  for  smaller  supplementary 
orders.  The  purchasing  agent  could  make  her  headquarters  at 
some  convenient  point,  using  a  parlor  for  an  office,  and  might 
even  herself  be  a  boarding  house  keeper.  She  should  have  a 
suitable  conveyance,  and  collecting  the  orders,  would  then  go  to 
the  most  favorable  market,  order  at  the  butcher's  half  a  dozen 
cuts  of  meat,  at  the  baker's  the  required  bread  and  pastry  and 
at  the  grocer 's  the  necessary  staples,  fruit  and  vegetables ;  there- 
after having  the  goods  delivered  in  her  own  wagon.  In  this 
way,  the  dealers  would  not  know  who  the  customers  were.  Her 
accounts  would  be  kept  for  the  club,  and  it  would  be  her  object 
to  derive  her  income  from  her  work.  With  small  effort  she 
could  build  up  a  club  which  would  be  very  profitable.  A  great 
saving  to  the  consumers  would  result  through  freedom  from 
the  labor  of  going  to  market,  as  the  purchasing  agent  could  at 
a  single  visit,  with  a  few  extra  minutes  of  time,  do  the  work  of 
all  the  housekeepers. 

Such  a  purchasing  agent  could  also,  with  advantage,  suggest 
bills  of  fare  in  keeping  with  the  season.  On  the  afternoon 
round,  she  could  deliver  proposed  bills  of  fare,  to  enable  the 
housekeepers  to  plan  the  next  day's  fare. 

In  connection,  also,  with  such  a  consumer's  club  could  be 
operated  a  general  kitchen,  in  which  pies,  cakes  and  bread  of 


356  THE  PRICE  OF  INEFFICIENCY 

the  best  quality  could  be  prepared.  The  impossibility  of  secur- 
ing first  class  products  of  the  baker's  art  under  present  condi- 
tions, should  make  such  kitchens  highly  popular.  The  kitchen 
could  also  cook  roasts,  chickens  and  articles  difficult  to  prepare 
at  home,  and  the  menus  of  the  various  members  would  be  pre- 
pared with  a  view  to  having  such  cooked  goods  delivered  to 
them  at  the  proper  hours.  Such  a  collective  kitchen,  with  ex- 
pert help,  would  soon  make  the  club  practically  a  necessity  to 
the  members  and  would  make  it  profitable  to  all  concerned. 
The  superiority  of  such  a  plan  over  the  delicatessen  store  lies 
in  the  fact  that  no  loss  would  occur  through  unsold  orders  since 
everything  cooked  would  be  ordered  in  advance,  and  no  waste 
would  result.  This  is  a  plan  that  would  be  of  especial  in- 
terest in  New  York  and  other  large  cities,  where  it  could  be  con- 
ducted on  a  scale  of  some  magnitude  in  an  apartment  house 
block,  particularly  by  the  arrangement  of  the  entrances  from 
the  center  of  the  block  and  a  system  of  local  telephones. 

Organizations  of  the  character  indicated  are  lacking  in  the 
United  States,  largely  because  of  the  lack  of  initiative  and  col- 
lective action.  The  responsibility  of  conducting  such  clubs 
needs  to  be  on  the  shoulders  of  the  club  itself,  and  the  manager 
should  not  be  expected  to  keep  the  organization  together  as  well 
as  to  conduct  its  business.  Women  with  business  ability,  how- 
ever, looking  for  new  occupations,  should  find  the  present  time 
one  particularly  propitious  for  undertaking  such  work,  and  it 
Avould  appear  to  be  a  form  of  club  that  could  be  very  success- 
fully managed  by  women  with  weekly  afternoon  meetings.  It 
would  be,  in  the  large  cities,  a  new  social  force,  bringing  to- 
gether neighbors  into  a  new  contact,  in  a  manner  which  does 
not  now  occur.  It  would  certainly  be  a  form  of  activity  as 
u.seful  as  suffragette  meetings,  and  one  that  would  produce  a 
much  more  favorable  effect  on  the  family  finances. 

The  effect,  too,  would  not  only  be  financial,  but  also  ethical, 
since  it  would  ser\'e  to  unify  the  life  of  the  family.  The  wife 
would  be  more  interestedly  occupied  with  the  affairs  of  the 
household,  and  the  cheapening  of  the  food  would  enable  her  to 
procure  for  the  same  outlay  a  better  quality,  or  the  same  quality 
at  a  lower  price.  All  the  members  of  the  family  would  be  bet- 
ter satisfied,  contented  and  better  nourished  for  the  battle  of 
life.  The  family  would  accordingly  be  a  stronger  unit  than  at 
present,  when  every  increase  in  prices  operates  to  destroy  and 
disrupt  it. 


CUTTING  OUT  THE  MIDDLEMAN  357 

The  plans  indicated,  are,  of  course,  only  suggestions  of  the 
most  general  nature,  and  numerous  others  could  be  suggested, 
but  enough  is  shown  to  indicate  the  great  possibilities  of  collec- 
tive action  exerted  in  this  way.  The  price  of  food  to-day  in  the 
United  States  is  not  only  an  economic,  but  also  a  political  ques- 
tion, and  it  is  easy  to  see  the  great  results  that  might  be  accom- 
plished by  a  well  organized  system  of  consumers'  unions,  oper- 
ating all  over  the  country. 

Our  individualistic  method  of  purchasing,  in  which  every 
purchaser  is  the  competitor  of  every  other  purchaser,  and  all 
are  indifferent  to  the  interests  of  the  others,  results  in  their 
exploitation  by  the  middlemen,  and  this  has  reached  such  a 
point  that  only  about  one-third  of  the  price  paid  by  the  con- 
sumer reaches  the  producer.  This  is  a  startling  price  to  pay 
for  our  inefficiency  and  unorganized  methods  of  purchasing. 


CHAPTER  XXIII 
PUBLIC  WELFARE 

Nervous  crystallization  of  Americans — Great  sum  total  of  inflictions — The 
five  senses  and  what  they  have  to  endure— Making  the  streets  hideous 
at  night — How  extravagance  is  encouraged — How  the  ear  is  scourged 
—The  great  vogue  of  the  flat  wheeled  street  car— Unbounded  energy 
with  which  the  automobile  makes  itself  disagreeable  and  dangerous — 
The  call  of  "huxtra!" — The  tobacco  hog — Disease  hazards  of  street 
car  travel — How  to  make  money  out  of  refuse  destruction — Garbage 
gathering  under  modern  conditions — What  the  sense  of  taste  has  to 
endure — Old  meat  and  fresh  bread  vs.  fresh  meat  and  old  bread — 
Hot  and  cold  foods— Dinner  generally  a  bad  job — What  a  rectifier 
of  spirits  "rectifies."— Bottled  in  bond  liquors— Soda  fountain  mys- 
teries— Drug  frauds— Murder  for  a  quarter  of  a  cent  profit — Psycho- 
logical effect  of  mal-nutrition — Effect  on  children  of  immigrants— 
What  happens  to  the  sense  of  touch— Violent  changes  of  temperature- 
Inefficiency  of  the  police — How  the  German  police  get  a  culprit  within 
three  days — Dealing  with  minor  infractions — Luxurious  ways  of  the 
American  wife  and  premature  age  of  the  husband — The  system  of 
official  complaints— The  public  on  the  job  abroad— Impositions  of 
builders  and  contractors— Offenders  of  the  streets — Hypocritical 
policy  of  dealing  with  the  oldest  of  professions — Cost  of  the  abolition 
of  tlie  canteen — Terrible  consequences  to  the  soldiers — Appalling  sys- 
tem of  effects  of  the  policy  of  the  whitened  sepulchre — ^The  sins  of 
the   fathers — Inefficiency   of   moral   courage. 

Among  the  adverse  factors  with  which  the  engineer  has  to 
contend  in  his  designing  is  crystallization,  which  is  caused  by 
long  continued  minute  vibrations,  and  which  ultimately  makes 
metals  so  hard  and  brittle  that  they  break  under  very  small 
strains. 

The  American  public  itself  is  largely  a  victim  of  nervous 
crystallization.  The  continual  annoyances  to  which  it  is  sub- 
jected produce  minute  vibrations  in  the  special  senses.  The 
sight  is  afflicted,  the  hearing,  taste,  touch  and  the  sense  of  smell, 
and  the  total  of  the  various  annoyances  creates  a  breaking  strain 
which  has  endless  consequences. 

The  term,  public  welfare,  conjures  up  ideas  of  great  public 
principles,   issues,   or   large   works,   but  the   aggregate  of   the 

358 


PUBLIC  WELFARE  359 

smaller  inflictions  which  are  endured  by  a  long  suffering  pub- 
lic, amounts  to  a  total  far  in  excess  of  even  the  greatest  of  single 
questions. 

Annoyances  of  such  a  character  are  utterly  unnecessary. 
They  should  not  be  tolerated,  being  for  the  most  part  so  readily 
remedied.  Yet  year  in  and  year  out  the  same  conditions  con- 
tinue, and  what  is  everj^body's  business,  being  nobody's  busi- 
ness, such  abuses  multiply  and  are  never  corrected  unless  some 
strong,  selfish  interest  finds  a  profit  in  bringing  about  a  change. 

The  eye  is  subjected,  first  of  all,  to  a  multiplicity  of  inflic- 
tions. At  night  the  streets  are  either  poorly  lighted,  or  else 
glaring  advertisements  in  illumination  are  continually  flashing 
on  and  off.  These  are  made  to  create  as  violent  an  optical  im- 
pression as  possible,  and  are  usually  illustrative  of  some  ex- 
cessively vulgar  or  commonplace  advertisement. 

The  private  owners  of  the  buildings  on  which  these  unsightly 
abominations  are  placed,  derive  rentals  reaching  the  proportions 
of  small  fortunes  annually.  Commercial  considerations  thus 
place  a  high  premium  on  setting  us  as  glaring  a  nuisance  as  can 
be  devised. 

While  the  now-you-see-it — now-you-don 't  electric  sign  is  one 
of  the  greatest  nuisances  which  afflicts  the  sight,  it  is  by  no 
means  the  only  one.  Advertisements  generally  on  signboards 
are  crude  in  an  artistic  sense  and  cheap  in  every  sense.  Yet 
great  sums  are  wasted  annually  in  such  devices,  involving  all 
sorts  of  evil  consequences.  Not  only  are  the  advertisements 
costly  to  erect  and  maintain,  but  they  induce  the  public  to  buy 
goods  for  which  ordinarily  no  desire  would  be  experienced. 
Such  advertisements  are  thus  an  encouragement  to  extrava- 
gance. The  excessive  expenditures  which  the  public  are  thus 
tempted  to  make,  through  such  glaring  advertisements,  cause  dis- 
content, and  the  ceaseless  endeavor  to  excel  their  neighbors  in 
expenditure  thus  stimulated  is  a  fruitful  source  of  social  un- 
rest. 

Mayor  Samuel  Lewis  Shank  of  Indianapolis,  at  the  1912 
meeting  of  the  New  York  State  Agricultural  Society  at  Albany, 
described  this  condition. 

"Seventeen  years  ago,  the  father  of  a  family  paid  $12  for 
a  suit  of  clothes,  had  a  $40  horse  with  no  pedigree,  a  $30  buggy 
with  steel  tires,  a  $6  set  of  harness,  a  $35  cow  which  gave  five 
gallons  of  milk  a  day,  twenty-five-cent  chickens  which  laid  every 
day  and  a  good  watchdog  which  cost  nothing. 


360  THE  PRICE  OF  INEFFICIENCY 

"The  son  to-day  expends  $40  for  a  suit  of  clothes,  $5  for 
shoes,  $4  for  a  hat,  $2.50  for  a  shirt,  wears  a  white  collar  every 
day  with  cuffs,  the  buttons  in  which  cost  $20,  owns  a  $300  horse 
with  a  pedigree  longer  than  his  list  of  relatives,  $125  buggy 
with  ball  bearings  and  rubber  tires,  a  $30  set  of  harness  cov- 
ered with  brass,  a  $100  cow  with  a  great  pedigree,  but  who  gives 
but  half  a  gallon  of  milk  at  a  milking,  hens  costing  $1.25,  and 
a  dog  with  a  pedigree,  which  cost  $10. 

"In  household  furnishings,  to-day  a  $200  range  takes  the 
place  of  a  cook  stove,  and  a  $300  rug  the  place  of  a  rag  carpet 
mat.  In  olden  times  the  family  went  once  a  year  to  see  'Uncle 
Tom's  Cabin,'  at  small  cost.  To-day  it  goes  to  the  theater 
twice  a  week  at  $3.  Seventeen  years  ago  there  was  a  family 
dinner  with  plain  fare  but  to-day  dinner  is  served  at  a  big  cost, 
served  by  waiters  and  the  guests  are  sent  home  in  taxicabs.  In 
olden  times  nearly  everything  was  prepared  in  the  home,  to-day 
it  is  nearly  all  purchased  outside  of  the  home." 

Advertisements,  it  may  be  readily  seen,  are  one  of  the  causes 
of  this  increased  era  of  extravagance. 

Among  other  serious  afflictions  of  the  eye,  which  cause  grave 
injury,  is  the  method  of  collecting  street  refuse  in  open  carts. 
Numberless  pedestrians  passing  through  clouds  of  dust,  come 
off  decidedly  the  worse  for  the  experience,  yet  it  continues  as 
a  permanent  feature  of  city  life,  when  it  might  be  easily  ob- 
viated by  closed  sanitary  carts. 

Street  railways  have  a  similar  disregard  for  the  sight  of  their 
patrons,  in  their  lighting  systems.  The  use  of  additional  power 
frequently  dims  the  lights,  while  at  crossings  and  switches  the 
lights  go  out  entirely.  This  annoyance  is  a  traditional  one 
and  in  all  probability  will  remain  a  fixture  of  street  car  travel. 

The  ear  is  afflicted  even  more  than  the  eye.  The  variety  and 
number  of  city  noises  is  so  great  that  an  unrealized  nervous 
strain  is  continually  undergone  which  contributes  to  neuras- 
thenia and  nervous  breakdowns. 

Among  the  preventable  but  exceedingly  aggravating  city 
noises  is  the  flat  wheeled  trolley  ear.  A  flat  wheel  is  caused  by 
improper  application  of  the  brakes,  causing  the  wheels  to  slide 
along  the  rails  and  wear  a  flat  spot,  which  at  each  revolution 
makes  a  pounding  noise.  A  flat  wheel  may  readily  be  remedied 
by  being  put  in  a  lathe  and  having  its  diameter  reduced  slightly 
to  the  bottom  of  the  flat  spot,  but  this  involves  expense,  which 
is  evidently  more  disagreeable  to  the  company  than  the  noise 


PUBLIC  WELFARE  361 

is  to  the  public,  since  the  lesser  evil  is  always  the  one  endured 
and  the  continuance  of  the  flat  wheel  must  prove  it  to  be  the 
lesser  evil. 

Another  of  the  noises  which  afflicts  the  ear  of  the  unoffending 
city  dweller  is  the  automobile  horn.  This  nuisance  is  wide- 
spread and  intensive.  It  exists  in  500,000  varieties,  that  being, 
according  to  the  latest  statistics,  the  number  of  automobiles  now 
at  large.  These  noises  range  from  a  mild  mannered  croak  to 
the  shriek  of  a  hyena,  and  interspersed  are  a  wide  variety  of 
explosive  sounds,  caused  by  popping  tires,  exploding  mixtures, 
muffler  cutouts,  back  fires  and  pre-ignitions  and  the  various 
other  ills  which  an  automobile  is  heir  to,  most  of  which  produce 
some  kind  of  a  noise. 

By  a  wise  provision  of  nature,  however,  the  automobile  is  not 
subject  to  flat  wheels,  otherwise  life  in  a  community  of  automo- 
biles would  be  unendurable.  The  worst  that  an  automobile  can 
do  with  its  wheels  is  to  run  over  the  bystander,  or  slap  a  loose 
chain  against  the  fender. 

By  an  equally  wise  provision  of  nature,  trolley  cars  have  not 
adopted  horns,  remaining  content  with  bells  and  flat  wheels. 
There  are  many  things,  thus,  which  the  city  dweller  has  to  be 
thankful  for. 

Another  nuisance  which  is  confined  to  the  larger  cities  is  the 
shouting  of  extra  editions  of  newspapers.  Particularly  in  New 
York  is  this  infliction  systematically  practiced.  The  custom  is 
for  two  or  three  leather-lunged,  rawhide-tongued  newsboys, 
some  twenty-five  or  thirty  years  of  age  and  strong  enough  to 
lift  the  Flatiron  building  between  them,  to  suddenly  invade  a 
street,  making  night  hideous  with  their  cries.  They  seem  well 
satisfied  if  they  sell  a  single  penny  paper  for  five  cents  for  each 
block  shouted-up,  for  the  public  is  pretty  well  immune,  having 
long  since  discovered  in  most  cases,  that  the  contents  of  the 
newspapers  so  sold  have  appeared  in  earlier  editions  the  same 
day,  or  relate  to  some  minor  occurrence  in  a  distant  city. 

The  customs  of  newspapers  in  getting  out  extra  editions  and 
special  extra  editions  on  the  slightest  pretext  has  destroyed  any 
interest  in  them.     It  is  the  old  cry  of  wolf  too  often  repeated. 

Another  curious  phenomena  of  newspaper  publication  is  the 
timepieces  used  in  the  press  rooms.  Judging  by  the  hour  dates 
on  the  papers,  these  clocks  must  be  from  three  to  six  hours  ahead 
of  all  other  clocks,  since  the  four  o'clock  edition  is  usually  on 
sale  before  noon,  while  the  final  edition  or  eleven  o'clock  edition 


362  THE  PRICE  OF  INEFFICIENCY 

may  still  be  read  in  daylight.  The  calendars  in  the  weekly  and 
monthly  periodical  offices  are  not  to  be  outdone  by  the  news- 
paper press  room  clocks.  They  are,  indeed,  even  mere  fore- 
handed, for  it  is  a  very  backward  Saturday  paper  that  cannot 
be  purchased  on  Thursday  and  a  poor  Christmas  number  that 
is  not  on  the  news-stands  before  Thanksgiving  day,  and  forgotten 

by  Christmas. 

Compared  with  the  eye  and  the  ear,  the  nose  of  the  city  dweller, 
at  first  glance  appears  to  get  off  very  lightly.  It  is  true  that 
the  odor  of  politics  is  regularly  much  and  evilly  in  evidence, 
but  this  is  an  old  and  familiar  smell. 

The  automobile  again  furnishes  considerable  nasal  diversion, 
with  its  exhaust,  largely  due  to  the  carelessness  of  chauffeurs 
in  regulating  and  cleaning  their  motors,  and  in  the  failure  to 
use  a  good  quality  of  oil. 

The  sense  of  smell,  however,  finds  a  more  annoying  enemy  in 
the  tobacco  habit,  so  widely  prevalent  in  America.  Although 
many  street  railway  companies  forbid  smoking,  except  on  the 
"four  rear  seats"  the  smokers  are  apparently  illiterate  when 
it  comes  to  counting  seats.  Many  lines  go  further  and  forbid 
entirely  the  smoking  or  carrying  of  live  cigars,  but  they  fail  to 
make  any  provision  as  to  dead  ones,  which  are  vastly  more 
offensive. 

The  ventilation  of  street  cars  and  other  public  conveyances 
in  America  is  a  fearful  and  wonderful  thing.  Either  the  blasts 
of  the  Arctic  are  blown  through,  or  the  car  becomes  an  amateur 
black  hole  of  Calcutta.  Any  systematic  plan  or  idea  of  ventila- 
ting cars  is  utterly  beyond  the  furthest  reaches  of  the  imagina- 
tion of  a  traffic  manager.  On  street  railways  any  intelligence 
that  a  conductor  might  exhibit  is  dispensed  with  by  the  fixing 
of  the  heating  and  ventilating  devices  before  the  car  starts  out, 
and  the  conductor  is  as  helpless  as  a  passenger  to  make  any 
change. 

"While  each  individual  suffers  but  a  portion  of  each  day,  and 
will  not  take  the  trouble  to  object  to  the  imposition  Avhich 
springs  from  the  carelessness  and  greed  of  the  companies,  the 
total  amount  of  inconvenience  and  discomfort  endured  by  the 
traveling  public,  and  the  number  of  cases  of  disease  incubated 
in  the  cars  is  enormous.  It  could  all  be  remedied  by  a  little 
sharp,  united  action,  but  there  appears  no  prospect  of  any  such 
millennium. 

The  nose  of  the  city  dweller  also  suffers  from  the  method  of 


PUBLIC  WELFARE  363 

collecting  garbage  which  so  offends  the  eye.  The  garbage  re- 
mains in  exposed  cans  on  the  sidewalks  until  the  garbage  cart 
comes  to  scatter  part  on  the  street  and  take  what  is  left  to  the 
dumps.  The  latter  is  an  unsavory  locality,  but  one  that  is 
wholly  unnecessary,  as  cities  may  make  it  a  source  of  profit  by 
the  erection  of  refuse  destruction  plants.  Garbage  dumps  are 
a  menace  to  the  public  health  and  ruin  whole  sections  of  the 
city.  Indeed,  taking  into  consideration  public  dumps,  slaugh- 
ter houses,  chemical  factories,  metal  foundries,  tanyards,  ren- 
dering plants,  cellar  gratings,  garbage  cans,  beer  saloons,  dirty 
gutters  and  other  sources  of  vile  odors,  a  large  proportion  of 
every  city  is  uninhabitable  and  highly  disagreeable  and  dan- 
gerous.    With  proper  regulation  this  need  not  be  the  case. 

Perhaps  the  most  intolerable  condition  which  can  exist  in  any 
city  is  that  created  by  a  garbage  gatherers'  strike.  While  accord- 
ing to  the  venerable  proverb,  the  water  is  never  missed  until 
the  well  runs  dry,  it  is  far  truer  that  the  garbage  is  never  vio- 
lently noticeable  until  it  is  not  missed.  When  the  garbage  men 
strike  they  are  realized  to  be  among  the  most  absolutely  neces- 
sary members  of  society. 

The  installation  of  refuse  destruction  plants  is  a  highly  desir- 
able reform.  From  the  sanitary  point  of  view  it  is  the  only 
satisfactory  solution  of  the  problem  of  city  refuse  disposition. 
Careful  research  both  in  this  city  and  abroad  has  proved  con- 
clusively that  disease  is  spread  through  the  use  of  refuse  dumps 
for  any  kind  of  city  waste.  The  decomposition  of  garbage 
causes  offensive  and  poisonous  odors  to  be  emitted.  Flies  in 
millions  cover  the  dumps,  feeding  on  the  decaying  matter  and 
carrying  away  germ  laden  matter  in  the  particles  of  filth  on 
their  feet  and  bodies,  which  are  deposited  upon  the  food  and 
skin  of  human  beings  when  the  flies  light  upon  and  crawl  over 
them.  Thus  the  harmful  germs  enter  the  human  system  and 
contagion  spreads  the  disease.  Refuse  is  sure  to  contain  some 
disease  germs.  Poor  families  frequently  do  not  call  in  a  doctor 
until  the  patients  have  been  ill  for  a  long  time,  and  all  clothing, 
paper,  etc.,  near  them  is  apt  to  become  infected.  This  infected 
stuff  when  thrown  on  the  dumps  is  sure  to  be  picked  over  by 
other  poor  people,  in  spite  of  the  most  careful  regulations  to 
the  contrary,  and  the  new  possessor  of  his  family  is  almost  cer- 
tain to  become  infected.  Beds  and  bedding  are  frequently 
thrown  away  after  a  patient  has  recovered  from  a  contagious 
disease,  without  proper  fumigation,  and  these  are  morally  cer- 


364  THE  PRICE  OF  INEFFICIENCY 

tain  to  fall  into  the  hands  of  the  poor,  spreading  disease  among 
them.  If  ashes  could  be  kept  clean  there  would  perhaps  be 
little  danger  to  health  from  disposing  of  them  at  fills  and 
dumps,  but  as  household  ash  always  contains  some  garbage,  it 
should  also  be  burned  to  make  it  entirely  innocuous. 

There  are  still  other  sanitary  reasons  for  the  use  of  this  sys- 
tem. Ashes  carried  alone  in  carts  cause  dust  to  fly  about  to 
the  detriment  of  people's  lungs,  eyes  and  clothing,  while  sepa- 
rately collected  garbage  emits  odors,  and  is  apt  to  drip  infected, 
unclean  fluid  in  the  streets.  The  collection  of  both  ash  and  gar- 
bage in  the  same  carts  is  advisable,  since  the  ash  absorbs  the 
moisture  and  both  dust  and  drip  are  eliminated.  Rubbish, 
ashes  and  garbage  can  all  be  collected  at  the  same  time  in  the 
same  carts,  reducing  expense.  Filled  land,  made  up  largely  of 
mixed  refuse,  is  liable  to  cause  spontaneous  combustion  when 
built  upon,  adding  a  fire  hazard  of  a  dangerous  sort.  The 
health  and  welfare  of  a  city,  which  should  be  its  chief  consider- 
ation, require  that  all  refuse  should  be  purified  by  burning  be- 
fore finally  being  disposed  of. 

Destructors  produce  steam  and  clinker,  which  in  most  cases 
can  be  sold  at  a  good  profit.  Roughly  speaking,  a  destructor 
burning  ordinary  garbage  will  give  steam  enough  to  light  the 
city  streets,  thus  saving  the  amount  paid  for  this  purpose.  Or 
it  will  heat  the  city  or  run  the  water  works,  including  the  aver- 
age amount  of  pumping.  The  vitreous  clinker  makes  a  high 
grade  of  building  concrete,  paving  slabs  or  brick. 

]\rodern  engineering  methods  enable  the  refuse  destructor 
plants  to  accomplish  their  work  and  to  consume  their  own  gases 
and  smoke,  so  that  no  nuisance  whatever  results.  The  system 
of  destructors  is  far  superior  to  any  other  means  of  refuse  dis- 
posal and  its  adoption  by  all  cities  would  prove  a  great  sanitary 
improvement. 

The  sense  of  taste  of  the  American,  both  of  the  city  and  the 
country^  dweller,  suffers  together  with  his  other  special  senses. 
To  deceive  the  taste,  a  complicated  chemical  industry  has  grown 
up,  which  resorts  to  the  uses  of  a  wide  variety  of  drugs  and 
chemicals  as  adulterants.  It  is  indeed  difficult  to  obtain  any 
kind  of  food  in  the  United  States  which  is  not  subjected  to 
adulteration  or  treatment  at  some  stage  in  its  progress  from  the 
producer  to  the  consumer,  and  although  national  and  state  laws 
of  a  stringent  character  exist,  they  do  not  seem  to  effect  the 
remedies  desired. 


PUBLIC  WELFARE  365 

The  public  itself  is  very  careless  and  even  when,  in  accordance 
with  the  law,  the  label  of  a  food  article  bears  the  notice  of  the 
presence  of  a  chemical  or  an  adulteration,  the  purchaser  does 
not  either  take  the  time  to  look  into  the  matter,  or  does  not  un- 
derstand the  true  meaning  of  the  long,  technical  name  given  to 
the   adulterant   or  preservative. 

The  carelessness  of  the  public  in  respect  to  its  own  health 
needs  to  be  remedied  before  any  substantial  improvement  can 
be  expected  from  the  manufacturer  and  dealer  in  foodstuffs. 
The  American  exhibits  the  utmost  carelessness  in  regard  to  his 
food,  not  only  as  to  its  purity  and  quality,  but  in  the  way  it  is 
prepared  and  ser%'ed,  and  the  strange  juxtapositions  that  he 
makes  in  his  bill  of  fare. 

It  is  the  custom  of  the  American  to  eat  fresh  bread  and  old 
meat,  the  latter  shipped  halfway  across  the  continent  and  held 
in  cold  storage,  perhaps  for  several  months.  The  bread,  how- 
ever, is  always  hot  out  of  the  bakeries  which  are  located  in  con- 
venient places.  Freshness,  however,  seems  to  be  the  only  quality 
demanded  in  bread,  for  if  it  is  not  eaten  when  fresh  it  can 
never  be  eaten.  The  bakeries  are  almost  without  exception 
operated  in  an  unsanitary  manner  and  the  system  of  inspection 
of  bakeries  is  either  lacking  or  totally  inadequate.  For  the 
most  part  they  are  located  in  basements  with  Little  or  no  ventila- 
tion, and  they  are  by  no  means  inviting  looking  places.  Recent 
disclosures  of  trafiSc  in  rots  and  spots,  that  is  eggs  which  have 
long  since  passed  their  period  of  sanitaiy  usefulness,  go  to  show 
what  ingredients  are  employed  by  the  bakeries  in  the  manu- 
facture of  bread  and  pastry.  The  latter  is  usually  very  cheap, 
which  is  not  to  be  wondered  at  when  the  nature  of  its  contents 
are  known. 

Hot  bread  is  admittedly  one  of  the  most  injurious  of  foods, 
yet  Americans  not  content  alone  with  bread  still  warm  from 
the  bakeries,  are  fond  of  biscuits,  taken  right  out  of  the  oven, 
and  of  a  leathery-like  disc  of  bread  like  material  known  as  a 
pancake  or  griddle  cake,  eaten  as  soon  as  possible  after  leaving 
a  hot  plate  or  iron  and  saturated  with  syrup  manufactured 
with  acids  deviously.  This  mass  is  washed  down  with  ice  cold 
water,  after  which  the  American  feels  ready  for  the  days  busi- 
ness. 

To  top  off  his  dinner,  he  takes  a  dish  of  ice  cream,  followed 
by  hot  coffee.  The  disorders  of  the  stomach  thus  produced 
affect  the  teeth  and  result  in  the  art  of  dentistrv  reachiao-  a 


366  THE  PRICE  OF  INEFFICIENCY 

high  state  of  development.  The  American  dentist  has  a  great 
reputation,  but  while  his  skill  is  commendable,  the  state  of  affairs 
which  gives  rise  to  that  skill  is  by  no  means  one  upon  which  the 
public  can  be  congratulated. 

If  Americans  followed  the  custom  abroad  of  having  slaughter 
houses  in  every  city,  and  of  eating  fresh  meat  and  stale  bread, 
there  would  not  be  so  much  prosperity  among  the  dentists  and 
the  undertakers  and  the  American  would  be  a  different  person 
in  many  respects. 

The  art  of  cooking  is  almost  an  unknown  art  in  America. 
Owing  to  adulterated  foods,  the  cook  gets  a  bad  start,  and  but 
little  effort  is  made  to  catch  up  with  the  procession.  In  cities 
where  great  chains  of  restaurants  have  sprung  up,  cooking  is 
carried  on  in  wholesale  and  destructive  manner  and  palatable 
foods  are  made  an  impossibility. 

America  suffers  too,  from  the  fact  that  her  foodstuffs  grow 
too  rankly,  and  lack  the  fine  flavor  which  the  European  food- 
stuffs have  in  their  natural  state. 

The  climate  and  the  nature  of  the  soil,  together  with  a  high 
state  of  agricultural  skill,  the  inheritance  of  generations  of  hus- 
bandmen, all  combine  to  give  European  foodstuffs  a  fine  flavor. 
The  cattle  too,  feeding  on  a  finer  quality  of  grass  and  grain, 
provide  meats  of  a  better  flavor.  Added  to  this  is  the  fact  that 
cooking  is  thoroughly  understood.  The  European  table  thus 
becomes  far  superior  to  the  American,  and  faring  better,  he 
takes  more  time  to  enjoy  his  food.  Owing  to  the  natural  in- 
feriority of  American  foodstuffs  and  the  prevalence  of  adulter- 
ation, the  American  cook  should  be  more  highly  trained  and  the 
American  should  devote  more  time  to  his  meals.  The  con- 
trary, however,  is  the  case. 

The  appetite  of  the  American  must  be  tempted  with  artificial 
condiments.  One  of  the  most  noticeable  of  the  table  appoint- 
ments is  the  bottle  of  catsup.  What  this  really  contains  is  the 
most  profound  culinary  mystery  that  has  ever  remained  un- 
solved, but  veritable  rivers  of  it  are  consumed  in  the  effort  to 
make  the  food,  tasteless  in  itself  and  poorly  prepared,  even 
slightly  palatable.  The  American  usuallly  eats  because  it  is 
time  to  eat,  rather  than  because  he  looks  forward  to  the  meal 
with  anything  like  feelings  of  agreeable  anticipation,  and  when 
it  is  time  to  eat  he  usually  eats  as  quickly  as  possible  in  order 
to  get  through  with  a  bad  job. 

He  appears  to  have  little  or  no  concern  as  to  what  he  puts 


PUBLIC  WELFARE  367 

in  his  mouth  or  the  temperature  of  the  mixture,  so  long  as  it 
has  a  noticeable  temperature. 

It  is  in  the  saloon  that  the  American  finds  the  most  devious  of 
all  the  combinations  which  he  puts  into  his  mouth.  The  liquors 
which  are  dispensed,  in  spite  of  stringent  laws,  are  concoctions 
of  the  most  dangerous  chemicals,  either  mixed  in  the  saloon 
cellar  or  "blended"  by  the  "rectifier"  of  spirits.  The  term 
"rectifier"  is  one  of  the  most  respectable  frauds  that  exists. 
The  rectifier  makes  it  his  business  to  mix  spirits  with  whiskey, 
he  rectifies  the  spirits,  that  is  to  say,  practically  raw  alcohol, 
with  some  whiskey,  and  while  he  rectifies  the  spirits,  what  he 
does  to  the  whiskey  had  better  be  left  unsaid.  At  best  it  is  a 
legal  adulteration,  but  with  great  frequency,  the  product  is  an 
illegal  mixture  of  spirits,  coloring  and  flavoring  chemicals  and 
a  modicum  of  whiskey,  which  while  itself  pure,  may  be  of  a 
very  inferior  qualit^^  This  mixture  of  the  rectifier's  reaches 
the  saloon  where  the  saloon  keeper  subjects  it  to  his  own  skill  as 
an  adulterator,  as  a  means  of  increasing  his  profits,  and  the 
liquid  that  the  gayly  inclined  citizen  finally  puts  in  his  mouth 
is  a  product  of  chemistry,  with  but  a  distant  relation  to  the  art 
of  distillation. 

It  may  be  said,  and  quite  apart  from  any  suggestion  of  pro- 
hibition, that  anybody  who  drinks  anything  except  beer  in  an 
American  saloon  is  a  dupe  and  a  fool,  and  the  drinker  of  beer, 
while  he  may  be  getting  a  pure  beverage,  gets  one  overcharged 
with  alcohol  and  of  a  very  inferior  if  not  unwholesome  quality, 
often  stale  and  invariably  served  at  a  temperature,  not  as  regu- 
lated by  law  as  in  Germany,  but  too  cold  for  healthful  assimila- 
tion, and  purposely  so  to  disguise  the  taste,  which  would  often 
be  intolerable  if  served  at  the  proper  temperature. 

The  only  drink  in  America,  whose  purity  is  assured,  is  the 
whiskey  that  is  bottled  in  bond.  One  or  more  government  offi- 
cers are  always  on  duty  at  every  distillery  and  after  the  whiskey 
is  distilled,  it  is  immediately  placed  in  barrels  in  an  adjoining 
warehouse  in  charge  of  the  government  officer.  Here  it  remains 
under  bond  in  the  barrels  until  it  is  properly  aged,  and  it  is 
then  released  by  the  government  on  the  payment  of  the  tax. 
The  barrels  then  go  to  the  rectifiers,  but  in  the  "bottled  in 
bond"  whiskey,  the  whiskey  is  poured  into  the  bottles  before 
being  removed  from  the  warehouse,  and  the  government  stamp 
is  placed  over  the  cork  and  neck  of  the  bottle,  so  that  the  con- 
sumer knows  not  only  that  the  whiskey  is  pure  but  also  knows 


368  THE  PRICE  OF  INEFFICIENCY 

when  it  was  distilled  and  when  it  was  placed  in  the  bottle.  Al- 
though pure,  its  quality  will  depend  on  the  skill  of  the  distiller 
and  the  nature  of  the  ingredients,  the  fame  of  Kentucky  whiskey 
being  attributable,  for  example,  to  the  excellence  of  the  water 
used  in  making  the  mash,  it  being  from  springs  in  a  limestone 
formation. 

It  wiU  never  be  safe  to  drink  anything  in  an  American  saloon 
until  every  drink  is  served  from  an  original  bottle  bottled  in 
bond.  The  patron  of  a  saloon  under  ordinary  circumstances 
not  only  ruins  his  health,  but  in  doing  so  acquires  a  taste  for 
the  raw  concoctions  he  consumes,  so  that  a  drink  of  genuine 
liquor  seems  tasteless  and  flat.  Stringent  laws  exist  against 
refilling  bottles  of  whiskey  and  if  anyone  cares  to  see  a  saloon 
keeper  turn  pale,  let  him  order  a  drink  of  any  well  known 
brand  from  a  half  emptied  bottle,  and  then  hold  it  to  the  light 
in  comparison  with  a  bottle  of  the  genuine  with  which  he  has 
provided  himself.  The  difference  in  color  shows  the  adultera- 
tion and  means  a  term  in  prison  for  the  offender  if  the  case  is 
pushed.  The  greed  of  the  saloon  keeper,  however,  is  so  great, 
that  these  grave  chances  are  constantly  being  run,  and  it  is  thus 
that  the  law  is  powerless  to  effect  a  remedy  in  such  a  manner. 
Only  by  taking  hold  at  the  source  can  adulteration  be  stopped. 

Only  less  noxious  are  the  drinks  served  at  soda  fountains. 
What  mixtures  of  chemicals  these  may  be,  is  only  known  to  the 
trade.  Too  often  they  contain  alcohol  and  an  unwholesome 
combination  of  acids  and  flavors.  The  same  is  true  of  ''ice 
cream"  as  served  in  "ice  cream  parlors."  The  demand  for 
cheapness  by  the  public  and  the  rapacity  for  profits  on  the  part 
of  druggists  and  confectioners  who  cheat  in  candy  as  in  "ice 
cream"  exposes  women  and  children  to  conditions  as  harmful 
as  those  met  by  men  in  saloons.  Wliat  remedy  there  is  to  be 
for  this  is  difficult  to  forecast.  It  certainly  will  not  be  feasible 
for  ice  cream  to  be  bottled  in  bond  or  for  candy  to  have  a  gov- 
ernment stamp  on  each  lump ;  while  an  honest  race  of  druggists 
and  confectioners  is  equally  impossible.  More  stringent  and 
better  laws  and  better  control  of  the  sources  of  manufacture 
are  needed  and  an  extension  of  the  system  of  bonded  ware- 
houses for  manufacturers  of  foodstuffs.  Greater  care  on  the 
part  of  consumers  is  also  desirable. 

Of  a  far  more  sinister  aspect,  however,  is  the  adulteration  of 
drugs,  perpetrated  largely  by  the  small  druggist.  It  is  almost 
incredible,  the  cheapness  and  murderousness  of  the  adulteration 


PUBLIC  WELFARE  369 

practiced.  In  prescriptions,  the  druggist  will  use  an  adulterated 
or  diluted  article  or  ingredient,  or  ^vill,  as  cases  in  court  fre- 
quently show,  substitute  other  ingredients,  which  change  or 
weaken  the  effect  intended  by  the  physician  and  confusing  his 
treatment  of  the  case,  frequently  result  in  the  death  of  the 
patient.  And  the  profit  derived  by  the  druggist  from  such 
substitution  is  usually  a  most  trifling  amount.  Cases  have 
come  up  in  which  willful  adulterations  were  systematically  prac- 
ticed which  yielded  but  a  quarter  of  a  cent  profit,  yet  which 
frequently  resulted  in  the  death  of  children  from  a  dangerous 
disease. 

Among  druggists  the  betrayal  of  trust  of  common  honesty 
with  which  they  are  charged,  is  not  perhaps  any  more  prevalent 
than  in  any  other  field  of  business  life,  but  in  their  eases  the 
results  are  far  more  serious. 

The  dispenser  of  drugs  is  far  too  mysterious  in  his  operations. 
He  retires  behind  his  high  partitions  and  compounds  in  secret 
his  mixtures,  charged  with  life  or  death  for  the  invalid,  who 
has  no  more  protection  against  the  greed  and  rapacity  of  the 
druggist  than  afforded  by  the  latter 's  flimsy  conscience.  More 
publicity  should  attend  the  compounding  of  prescriptions  and 
the  physician  should  himself  be  made  responsible  for  seeing 
that  the  druggist  does  not  poison  the  patient. 

The  high  screen  should  be  done  away  with  and  prescriptions 
compounded  in  the  presence  of  the  purchaser.  The  prescrip- 
tions should  be  written  in  an  understandable  way,  and  the  pur- 
chaser should  see  that  the  amounts  called  for  and  the  ingredi- 
ents prescribed  were  actually  put  into  the  prescription. 

The  possession  by  a  druggist  or  a  drug  manufacturer  partic- 
ularly, of  adulterated  drugs  should  be  made  a  felony,  for  the 
only  object  that  can  be  in  view  in  having  such  adulterations 
in  his  possession  is  to  cheat,  and  a  cheat  of  this  character  is  the 
meanest,  most  despicable  and  dangerous  of  all  cheats. 

The  carelessness  of  the  public  in  what  it  eats  and  drinks  has 
a  most  serious  effect  on  the  nation  as  a  whole.  Poor  and  adul- 
terated foods  result  in  poorly  nourished  systems  and  bad  teeth, 
which  in  turn  throw  a  further  burden  on  the  weakened  stomach. 
The  whole  body  suffers  from  the  digestive  disorders  and  with 
the  brain  no  longer  clear  and  active,  the  individual  becomes 
stupid,  bad  tempered,  erratic  and  loses  initiative  and  energy. 
All  business  suffers,  and  a  population  so  afflicted  neglects  its 
rights  and  listens  more  readily  to  demagogues  and  charlatans. 


370  THE  PRICE  OF  INEFFICIENCY 

Swindles  of  all  kinds  flourish,  respect  for  law  and  order  declines 
and  a  condition  of  disorganization  and  anarchy  approaches. 
The  whole  body  politic  is  poisoned  by  the  bad  foods  which  poison 
the  individuals  and  the  ability  of  the  individual  to  secure  good 
food  is  correspondingly  lessened. 

These  conditions  affect  most  the  native  population,  but  as 
rapidly  as  immigrants  become  Americanized,  they  are  affected 
in  a  similar  manner. 

Superintendent  Maxwell,  the  head  of  the  New  York  public 
school  system,  is  authority  for  the  statement  that  foreign  born 
children  and  the  children  of  foreign  born  parents  have  better 
memories  than  American  children.  This  he  ascribes  to  a  better 
condition  of  the  teeth  and  the  digestion,  the  result  of  the  continu- 
ance of  the  foreign  dietary  and  customs  on  the  part  of  the 
parents. 

Upon  becoming  Americanized,  however,  in  the  second  and 
third  generation,  the  children  become  so  thoroughly  imbued 
with  American  ideas  that  they  are  ashamed  of  everything  con- 
nected with  their  foreign  origin  and  even  refuse  to  learn  the 
language  of  their  fathers.  All  the  old  healthful  customs  are 
forgotten  or  tabooed  and  the  new  Americans  are  soon  in  the 
habits  of  the  natives  and  suffer  equally  from  carelessness  and 
waste. 

Twenty  years  ago  we  were  receiving  a  much  higher  class  of 
immigrants  than  at  present,  for  as  time  passes  and  economic 
conditions  in  America  approach  those  of  foreign  countries,  the 
better  class  of  immigrants  which  we  once  had  are  no  longer  at- 
tracted and  the  flood  becomes  of  a  lower  and  lower  quality.  As 
even  the  children  of  these  low  clashes  of  immigrants  are  superior 
in  memory  and  study  to  the  native  Americans  now  and  to  the 
American  born  children  of  our  former  high  class  of  immigrants, 
it  will  be  seen  that  when  the  present  immigrants'  children  have 
become  Americanized  in  the  next  generation,  a  very  low  grade 
of  pupils  will  result.  As  a  consequence,  this  country  will  no 
longer  be  able  to  hold  its  own  with  foreign  countries  which  em- 
ploy better  methods  of  nourishment  and  which  are  being  drained 
of  the  inferior  elements  of  their  populations,  thus  leaving  room 
for  the  better  classes  to  expand.  America  is  already  suffering 
from  such  conditions  and  is  losing  ground  in  the  international 
contest.  A  new  point  of  view  must  be  taken  and  the  individual 
nuist  learn  to  guard  his  own  health  better,  both  as  a  duty  to 
himself  and  to  his  country. 

As  to  the  fifth  sense,  the  sense  <o£  touch  and  feeling,  much  of 


PUBLIC  WELFARE  371 

the  foregoing  also  applies.  To  the  experienced  American,  the 
word  touch  carries  in  addition,  most  unpleasant  meanings,  as 
he  designates  borrowings  by  that  name  and  when  he  has  been 
relieved  of  his  valuables  by  a  pickpocket,  he  also  has  occasion 
to  use  the  word  touch.  It  has  thus  most  uncomfortable  associa- 
tions, and  when  the  sense  of  temperature  is  included,  no  im- 
provement is  had. 

Subjected  to  a  climate  of  quick  and  sudden  changes,  one  day 
hot  and  the  next  day  cold,  the  American  had  added  to  his  un- 
wholesome nourishment,  unwholesome  weather.  An  untold 
amount  of  sickness  and  death  results  from  these  changes  and 
lack  of  preparation  for  them,  as  well  as  great  nervous  strains. 

Women  dress  too  lightly  in  order  to  be  fashionable,  and  they 
must  draw  on  their  nervous  force  merely  to  keep  warm.  If 
they  do  wear  warm  clothing,  it  is  in  the  shape  of  expensive  furs, 
often  heavy  coils  around  the  neck,  which  serve  more  for  pur- 
poses of  adornment  than  for  protection  against  the  weather. 

Men  dress  with  somewhat  more  intelligence,  but  they  have  a 
weakness  not  for  warm  furs  around  the  neck,  but  for  stiff  col- 
lars, cold  in  cold  weather  and  hot  in  hot  weather  and  about  as 
uncomfortable  a  neck  adornment  as  could  possibly  be  devised. 
The  discomfort  of  this  article  of  apparel  is  added  to  both  by  the 
irritation  of  getting  it  adjusted,  and  by  the  condition  to  which 
it  is  reduced  by  the  laundries.  These  institutions  employ  chem- 
icals in  their  operations  to  such  an  extent  that  linen  and  other 
garments  are  quickly  rotted  out.  Whether  the  collar  and  shirt 
manufacturers  control  the  laundries  is  not  known,  but  if  the 
object  of  the  laundries  was  to  promote  the  business  of  the  collar 
and  shirt  makers,  they  could  scarcely  be  more  successful  in  their 
destructive  tactics.  This  is  an  abuse  of  a  nature  difficult  to 
rectify  and  can  only  be  accomplished  by  rigid  inspection. 

In  the  street  cars,  the  companies  provide  little  or  no  heat  and 
passengers  taking  long  rides  are  subjected  to  the  greatest  dis- 
comforts, not  alone  from  the  freezing  cold  but  from  over- 
crowding, and  draughts  through  the  cars  from  doors  opened  by 
the  alighting  passengers  and  left  open  by  the  conductors. 

Half  frozen  on  the  cars,  the  American  overheats  his  houses, 
especially  with  steam  heat,  which  produces  a  dry  atmosphere. 
The  transition  from  overheated  rooms  to  cold  cars  is  thus  all 
the  more  injurious.  Sleeping  rooms  are  also  artificially  heated, 
a  practice  about  as  inimical  to  health  as  any  that  could  be  in- 
vented. 


372  THE  PRICE  OF  INEFFICIENCY 

The  American  is  subjected  not  only  to  a  multiplicity  of  an- 
noyances, discomforts  and  dangerous  impositions  and  inflictions, 
which  may  be  particularly  classified  with  reference  to  each  of 
the  five  special  senses,  but  also  to  a  large  variety  of  impositions 
which  affect  not  only  one  sense,  but  all  the  senses  collectively 
and  simultaneously,  and  if  there  were  more  than  five  senses, 
means  would  speedily  be  found  of  harassing  them,  by  the  horde 
of  exploiters  and  selfish  interests  which  confound  at  every  turn. 
The  public  is  robbed,  beaten  and  insulted  on  the  streets  at 
all  hours  of  the  day  and  night,  and  at  every  turn  there  is  some 
scheme  to  defraud  and  deceive.     Yet  one  of  the  most  effective 
measures  of  the  European  police  for  the  protection  of  the  public 
is  entirely  ignored  here,  and  that  is  the  system  of  the  registra- 
tion of  residence.     In  a  European  city,  every  one  is  required 
to  have  his  place  of  residence  on  file  with  the  police.     To  fail  to 
do  so  is  a  crime  in  itself.     Thus  at  any  moment  the  police  can 
lay  their  hands  on  any  person  who  may  be  desired.     This  is  a 
powerful  deterrent  of  crime. 

The  European  police  system  is  vastly  superior  to  the  Ameri- 
can system,  and  the  certainty  with  which  it  works  is  so  well 
understood  that  the  offender  does  not  take  the  chances  or  have 
the  opportunities  of  the  American  criminal.  It  is  an  almost 
invariable  rule  that  a  criminal  is  located  within  three  days ;  for 
if  an  individual  himself  does  not  report  his  residence,  the  land- 
lords of  both  his  old  and  his  new  residence  must  report  the 
change  within  three  days,  as  otherwise  they  would  be  liable  for 
punishment.  As  this  includes  hotels,  a  scrutiny  of  entries  dis- 
closes any  discrepancies,  which  are  speedily  investigated.  Even 
should  the  criminal  hide  himself,  when  he  comes  out  again  later 
on,  he  will  betray  himself  by  his  report  of  where  he  previously 
lived,  whether  it  is  true  or  false.  As  all  discrepancies  are  in- 
vestigated, the  criminal  has  a  hard  time,  and  generally  makes 
for  the  boundary,  where  he  again  has  a  hard  time  to  slip 
through. 

In  America,  criminals  are  located  by  the  police  especially  in 
the  larger  cities  almost  as  readily  as  in  Germany,  but  not  per- 
haps for  purposes  of  apprehension  so  much  as  for  purposes  of 
graft.  The  criminal  by  a  substantial  payment  goes  his  way 
and  the  police  and  their  superiors,  the  men  higher  up,  profit.  It 
was  recently  estimated  by  a  noted  underworld  expert,  Jack  Rose, 
in  the  New  York  American,  that  the  New  York  police  collect 
upwards  of  $16,000,000  a  year  in  graft  paid  them  by  gamblers, 


PUBLIC  WELFARE  373 

women  of  the  street,  pickpockets,  swindlers,  burglars  and  the 
like  for  immunity  from  arrest.  Jack  Rose  it  was  who  arranged 
for  the  murder  of  the  gambler  Herman  Rosenthal,  engaging 
Lefty  Louie,  Gyp  the  Blood,  Dago  Frank  and  "WTiitey  Lewis  for 
the  purpose  at  the  instigation  of  Police  Lieutenant  Becker,  whose 
partnership  in  his  gaming  house  was  about  to  be  exposed  by 
Rosenthal.  The  assassins  themselves  divided  $1,000  for  the  deed, 
but  had  they  refused  to  commit  it,  they  would  probably  have  been 
''framed";  that  is  to  say  convicted  on  a  trumped  up  charge. 
The  principal  law  used  by  the  police  in  "framing"  is  that 
against  the  carrying  of  concealed  weapons,  and  the  very  simple 
process  of  a  policeman  dropping  a  revolver  into  the  pocket  of 
an  arrested  person  which  is  thereupon  ''found"  on  his  person 
suffices  to  convict,  often  for  a  long  term  of  imprisonment  in  the 
case  of  a  professed  criminal.  This  law  is  like  many  others  of 
the  stripe  ostensibly  passed  for  the  protection  of  the  public  but 
in  reality  for  the  purpose  of  tightening  the  clutches  of  the  grafter 
on  the  criminal. 

The  partnership  of  the  police  and  criminals  is  a  sinister  mani- 
festation of  disrespect  for  law  which  could  not  exist  were  the 
political  system  such  that  the  public  could  express  its  will,  in- 
stead of  being  helplessly  entangled  in  the  hoopskirts  of  an  anti- 
quated constitution. 

Our  system  is  to  blame,  and  no  remedy  will  be  of  any  perma- 
nent good  except  the  remedy  of  a  reorganization  of  the  system. 

In  Germany,  where  the  governmental  system  is  such  that  the 
police  must  carry  out  the  will  of  the  people,  graft  is  unknown 
and  the  criminal  cannot  count  on  any  immunity  of  any  kind. 
He  draws  his  issue  directly  with  society,  and  large  and  small, 
has  little  hope  of  escape,  which  is  in  itself  a  powerful  deterrent. 

Knowing  the  certainty  of  the  police,  the  administration  of 
the  law  becomes  much  more  readily  carried  out.  For  example, 
if  an  automobilist  is  guilty  of  a  violation  of  the  speed  laws,  he 
is  not  then  and  there  arrested  and  confined  for  the  night,  but 
his  number  is  taken  and  a  couple  of  days  later  he  is  informed 
by  postal  card  when  and  where  to  appear  in  court.  The  bicy- 
clist, too,  must  carry  a  number  on  his  machine  as  well  as  upon 
his  person,  and  they  must  agree  or  else  he  is  summoned  too. 
These  numbers  on  the  wheels,  through  being  of  different  colors 
and  shapes  on  different  backgrounds,  and  of  different  types  of 
letters,  indicate  thereby  the  city  from  which  the  wheelman  hails, 
which  further  simplifies  the  police  work. 


374  THE  PRICE  OF  INEFFICIENCY 

Individuals  on  being  discovered  guilty  of  a  minor  infraction 
also  simply  give  their  addresses  and  evidence  to  establish  their 
identity,  being  then  allowed  to  go,  to  be  summoned  later  to 
court. 

The  police  officer,  too,  is  expected  to  take  cognizance  of  vio- 
ations  of  the  laws,  and  does  so.  If  he  sees  a  smoking  automo- 
bile, he  reports  its  number  of  his  own  accord,  not  overlooking 
it  as  the  American  policeman  does.  Similarly,  any  violation 
which  comes  to  his  attention  is  marked  in  his  report  book  in  the 
presence  of  the  violator  and  no  erasures  are  permitted  to  be 
made  in  the  book,  which  must  be  turned  in  every  night.  For 
each  of  such  summons  or  "arrests"  the  officer  in  some  towns 
receives  as  much  as  eight  cents  reward.  This  is  not  enough  to 
excite  his  cupidity  but  in  the  course  of  a  busy  day  will  buy  his 
cigars  and  drinks.  The  violator  is  duly  summoned  to  the  police 
station  where  he  pays  his  fine,  from  twenty-five  cents  up,  unless 
he  objects  and  demands  a  court  proceeding  when  the  officer  must 
come  to  appear  against  him. 

The  fines  being  small,  the  offender  usually  settles  without 
further  ado.  The  certainty  of  the  fine  and  the  consequent  an- 
noyance of  being  summoned,  and  the  certainty  that  the  officer 
will  report  the  next  violation  he  sees,  has  a  very  salutary  effect 
and  creates  a  respect  for  the  law  which  does  not  obtain  in  the 
United  States  where  fines  are  so  large  that  a  long  legal  struggle 
ensues  with  loss  of  time  to  the  officer  and  all  concerned  if  at- 
tempts are  made  to  enforce  minor  ordinances. 

The  result  is  that  the  American  is  constantly  subjected  to 
annoyances  and  impositions  which  the  European,  living  under 
a  better  system,  entirely  escapes.  The  total  effect  of  this  is 
seen  in  the  faces  of  the  men.  At  sixty,  they  have  an  appearance 
of  age  which  is  not  seen  in  the  European  for  ten  or  more  years 
later.  The  American  works  under  a  nervous  strain  caused  not 
only  by  the  irritation  to  which  he  is  subjected,  but  by  his  spas- 
modic and  hurried  method  of  work. 

American  women  are  out  to  spend  all  the  money  their  hus- 
bands can  get  hold  of,  and  the  efforts  of  the  husbands  to  keep 
them  in  idleness  and  to  supply  them  with  the  luxuries  of  life, 
helps  to  wear  out  the  American  long  before  his  time.  Abroad, 
the  woman  is  always  seeking  to  do  for  the  husband  and  to  make 
life  easy  for  him,  just  the  contrary  of  the  situation  in  America. 
The  result  is  that  the  European  husband  is  relieved  of  many 
cares  and  is  able  to  continue  his  work  vigorously  later  in  life, 


PUBLIC  WELFARE  375 

and  to  be  able  to  retire  on  a  competency,  whieli  would  have 
been  spent  had  he  had  an  extravagant  and  foolish  wife. 

Should  a  citizen  have  a  complaint  to  make  against  a  public 
servant,  he  finds  at  the  police  station  a  complaint  book  in  which 
he  writes  his  complaint.  The  entries  in  this  book  duly  come  to 
the  attention  of  the  higher  police  officials  and  suitable  action  is 
taken  promptly,  so  that  the  citizen  when  he  makes  such  a  com- 
plaint knows  that  it  will  receive  proper  attention. 

The  post  office  stations  are  similarly  provided  with  complaint 
books,  and  any  irregularity  or  negligence  suffered  by  a  citizen 
is  promptly  looked  into  and  rectified  if  the  complaint  appears 
in  the  complaint  book.  These  books  are  often  in  charge  of 
the  officials  against  whom  the  complaints  are  lodged,  and  they 
are  compelled  to  perform  the  unpleasant  duty  of  turning  in  the 
complaints  against  themselves.  This  in  itself  acts  as  a  strong 
incentive  to  close  attention  to  duty,  particularly  as  the  German 
public  is  by  no  means  backward  in  asking  for  the  production  of 
the  complaint  book. 

In  the  United  States,  if  a  complaint  is  made,  after  a  long 
interval,  the  person  making  the  complaint  secures  a  lengthy  and 
complicated  looking  document  with  numerous  blanks  to  be  filled 
out.  The  amount  of  work  which  this  involves  causes  it  to  be 
postponed  indefinitely,  and  so  the  complaint  never  amounts  to 
much.  In  police  circles  the  complaining  citizen  is  put  to  much 
inconvenience  and  loss  of  time  by  being  invited  to  appear  and 
identify  the  offending  officer,  which,  if  the  latter  has  removed 
his  mustache  or  otherwise  altered  his  personal  appearance,  is  by 
no  means  easy  to  do.  The  police  stand  together  in  a  clannish 
manner  when  one  of  their  number  is  invoved  in  any  difficulty, 
and  if  it  is  of  a  serious  nature,  apparently  the  whole  resources 
of  the  department  are  exerted  to  save  the  offender.  In  a  recent 
New  York  case,  eight  policemen  were  accused  of  perjury  in 
giving  evidence  to  clear  a  brother  officer.  This  spirit  is  inimi- 
cal to  public  welfare,  yet  it  is  a  condition  which  cannot  mthout 
great  difficulty  be  overcome. 

The  readiness  of  the  public  to  make  complaints  abroad  results 
in  a  much  more  efficient  administration  of  the  law.  The  police 
officer  is  compelled  to  attend  to  his  duty  and  to  take  cognizance 
of  violations.  The  public  consequently  is  much  less  imposed 
upon  and  a  great  many  nuisances  prevalent  in  America,  espe- 
cially on  the  streets,  are  not  in  evidence. 

The  use  of  open  gratings  on  the  sidewalks  for  the  purpose 


376  THE  PRICE  OF  INEFFICIENCY 

of  ventilation  is  not  allowed  for  one  thing,  abroad.  This  is  a 
nuisance  particularly  noticeable  in  the  summer  when  pedes- 
trians already  partially  overcome  by  the  heat,  encounter  blasts 
of  foul,  hot  air,  full  of  dust  and  other  foreign  matter,  blown  up 
out  of  the  gratings.  The  absence  of  regulations  in  this  matter 
shows  a  curious  respect  for  women.  A  particularly  great  im- 
position is  practiced  by  contractors  and  constructors  for  foun- 
dations and  buildings.  They  occupy  half  the  streets  for 
months,  with  building  materials  and  supplies.  It  is  customary 
even  to  place  large  steam  boilers  and  hoisting  machinery  and 
engines  in  the  street,  which  cause  inconvenience  to  traffic  for  long 
periods,  while  the  sidewalk  is  removed  and  platforms  erected 
which  are  on  a  higher  level,  so  that  the  public  passing  such  a 
building,  has  the  alternative  of  climbing  the  steps  and  taking 
chances  on  the  platforms  over  the  excavations,  or  of  making  a 
detour  in  the  open  street  amid  vehicles  which  are  dodging 
around  the  steam  boilers,  lime  beds,  concrete  mixers  and  piles 
of  structural  steel  and  bricks.  What  right  the  erector  of  a  pri- 
vate building  has  to  encumber  the  street  and  inconvenience  the 
public  is  not  clear,  nevertheless,  it  is  a  firmly  established  cus- 
tom. It  could  be  ended,  however,  with  very  little  trouble  by 
proper  ordinances. 

Another  nuisance  of  a  similar  character  is  the  presence  of 
vacuum  cleaning  engines  on  the  streets  with  hose  running  up 
into  the  buildings,  and  a  worse  form  of  this  nuisance  is  the 
engine  which  pumps  blasts  of  sand  used  to  clean  off  the  surfaces 
of  buildings.  These  particles  of  sand  fall  to  the  street  like 
snow  and  do  great  injury  to  the  eyes  of  the  passers-by,  but 
nevertheless  they  are  constantly  in  evidence. 

There  is  much  temporizing  with  nuisances  in  America,  where 
the  law  is  not  regularly  enforced  with  any  degree  of  vigor,  be- 
ing only  spasmodically  put  into  effect.  This  is  particularly 
noticeable  with  offenders  of  the  streets.  The  push  cart  peddler 
is  at  times  allowed  to  rest  in  security,  while  at  other  times  he 
is  harassed  with  no  end  of  severity. 

In  their  treatment  of  another  class  of  offenders  of  the  street, 
the  police,  actuated  by  a  vacillating  public  sentiment,  follow  a 
course  of  conduct  which  results  in  graft,  dishonesty  and  injus- 
tice. Americans  lack  the  moral  courage  to  deal  with  this  sub- 
ject in  a  direct  and  simple  manner,  and  allow  hypocritical 
moralists  to  make  laws  which  while  they  sound  well,  are  utterly 
impossible  of  execution.     The  result  is  that  the  offenders,  who 


PUBLIC  WELFARE  377 

are  more  offended  against  than  offending,  are  lionnded  out  of 
localities  where  they  tend  to  segregate  and  are  driven  into  the 
midst  of  uncontaminated  neighborhoods,  and  from  there  back 
to  the  streets,  where  they  are  exploited  by  the  police  until  the 
reformers  stir  matters  up  again,  when  the  scattering  process 
begins  all  over.  This  social  ulcer,  instead  of  being  properly 
treated  as  abroad,  is  thus  continually  being  pumped  back 
through  the  veins  of  the  social  organization,  until  the  extent 
of  moral  and  physical  contamination  which  results  from  the 
false,  cowardly  and  hypocritical  attitude  for  which  professional 
reformers  are  chiefly  to  blame,  reaches  an  appalling  total.  One 
instance  of  the  policy,  shown  in  the  abolition  of  the  army  canteen 
with  the  consequent  frequenting  by  soldiers  of  the  illegal  re- 
sorts near-by,  has  this  result:  that  the  proportion  of  disease  of 
a  certain  character  among  American  soldiers  is  19.7  cases  in 
100,  while  in  the  German  army,  the  similar  proportion  is  only 
one-tenth  as  great. 

These  figures  are  taken  from  a  petition  of  two  hundred  and 
seventy-five  of  the  foremost  medical  men  in  the  country  ad- 
dressed to  Congress  in  the  interests  of  a  bill  to  restore  army 
canteens,  since  without  canteens  the  soldiers  cannot  be  properly 
protected  from  the  situation. 

''The  venereal  peril,"  says  Surgeon-General  Torney,  in  his 
latest  report,  "has  come  to  outweigh  in  importance  any  other 
sanitary-  question  which  now  confronts  the  Army,  and  neither 
our  national  optimism  nor  the  Anglo-Saxon  disposition  to  ignore 
a  subject  which  is  offensive  to  public  prudery  can  longer  refuse 
a  frank  and  honest  confrontation  of  the  problem." 

There  has  been  a  steady  increase  in  the  class  of  diseases  "so 
that  the  admission  rate  which  was  8.46%  in  1897,  has  now 
reached  the  enormous  figure  of  19.7%."  A  comparison  with 
the  figures  of  some  of  the  European  armies  will  show  how  grave 
the  ease  is. 

Percent. 

American        19.7 

British    7.6 

Austro-Hungarian     5.4 

French     3.5 

Prussian     I.9 

Bavarian     I.5 

Now  as  the  petitioners  observe,  it  is  not  the  soldier  alone  who 
has  to  suffer. 

"Our  army  is  very  largely  composed  of  young,  unmarried 


378  THE  PEICE  OF  INEFFICIENCY 

men.  'When  they  marry,  they  should  become  the  fathers  of 
healthy  children,  and  so  add  to  our  population,  vitality  and  suc- 
cess as  a  nation.  But  the  fact  is  that  among  those  who  have 
contracted  venereal  diseases  in  the  army,  a  considerable  pro- 
portion will  be  sterile,  others  will  be  characterized  by  many 
abortions  and  their  living  children  will  be  defective,  blind  and 
diseased.  What  the  sorrows  of  their  infected  wives  may  be  we 
know  in  part,  the  rest  can  only  be  surmised." 

"When  conditions  such  as  these  exist  in  the  army,  where  in- 
dividual cases  are  promptly  treated,  it  may  readily  be  seen  what 
appalling  conditions  must  exist  in  private  life,  where  conceal- 
ment, lack  of  proper  medical  attention,  quack  doctors  and  other 
causes  produce  long  continued  invalidism  and  widespread  prop- 
agation of  the  diseases. 

The  American  public  in  its  failure  to  deal  directly  and 
honestly  with  ' '  the  most  ancient  of  professions, ' '  commits  a  crime 
against  itself  whose  consequences  infect  the  present  and  will 
infect  the  coming  generations.  The  suffering,  disease,  despair, 
degeneracy,  imbecility,  insanity  and  suicide  which  compose  the 
failure  to  deal  with  the  sources  of  infection,  and  the  hypocriti- 
cal attitude  on  the  whole  question  enforced  by  preachers  and 
false  moralists,  are  a  terrible  indictment  of  our  civilization. 
Well  may  the  individual  suffer  the  consequences  of  his  indis- 
cretion, but  the  sins  of  the  fathers  are  visited  on  the  children, 
and  surely  the  coming  generations  should  not  be  condemned  to 
the  fate  in  store  for  so  large  a  proportion  of  its  numbers,  to 
gratify  the  sanctimoniousness  of  a  handful  of  professional 
moralists.  This  is  inefficiency,  not  of  men  or  machines,  but  the 
inefficiency  of  lack  of  moral  courage,  of  fair  dealing  and  frank- 
ness and  common  honesty. 


CHAPTER  XXIV 
DOMESTIC  RELATIONS 

The  complicated  question  of  divorce— Its  great  increase — Largely  due  to 
economic  factors — The  home  no  longer  a  small  factory  as  in  former 
generations — Present  necessity  of  women  leaving  the  home  to  do  work 
that  was  formerly  done  in  the  home — Is  the  increase  of  divorce  bene- 
ficial?— One  marriage  in  twelve  ends  in  divorce — Ethical  effect  on 
children — Lack  of  control  of  parents  over  children — Lack  of  disci- 
pline— Failure  of  school  discipline — Unpreparedness  of  young  men 
and  young  women  for  the  certain  discipline  of  the  world — Wrong  ex- 
amples set  bj'  parents  and  school  teachers — Superficial  education. 

The  problem  of  divorce  in  America  is  one  of  great  complexity 
and  of  the  greatest  importance.  The  stability  of  the  state  rests 
on  the  family,  and  tendencies  which  weaken  the  family  ties 
undermine  the  foundations  of  the  state. 

But  though  divorce  has  increased  greatly  in  the  United 
States  in  recent  years,  there  are  many  important  factors  enter- 
ing into  the  subject,  and  whether  the  increased  frequency  of 
divorce  denotes  a  weakening  of  the  ties  of  the  family,  or  is  an 
index  of  other  conditions  is  a  much  controverted  subject. 

Undoubtedly  divorce  has  lost  much  if  not  practically  all  of 
the  stigma  it  carried  half  a  century  ago,  due  to  the  weakening 
of  religious  authority.  It  is  therefore  a  more  freely  sought 
remedy  and  consequently  occurs  with  much  greater  frequency, 
which  continues  the  process  of  diminishing  the  stigma. 

A  second  important  cause  of  divorce  is  the  great  economic 
freedom  of  women,  due  to  the  transfer  from  the  home  to  the 
factory  of  much  work  formerly  most  economically  done  in  the 
home.  A  century  ago,  every  home  with  its  spindle  and  loom 
w^as  a  small  factory.  Mother  and  children  labored  vastly  harder 
and  longer  than  they  would  now  in  a  factory  to  accomplish  the 
same  result.  Thus  economic  factors  accentuated  the  family 
bond.  To-day,  the  woman  doing  the  same  work  outside  the 
home,  is  much  freer  than  in  those  days.  She  may  choose  a  hus- 
band with  greater  deliberation  and  if  she  is  not  happy  in  the 
union,  she  may  return  to  her  work  more  readily. 

379 


380  THE  PRICE  OF  INEFFICIENCY 

The  family,  to-day,  thus  stands  on  its  own  feet,  so  to  speak, 
and  the  increase  of  divorce  under  the  circumstances  is  no  cause 
for  alarm  to  anyone,  save  the  bigot  and  the  ignorant,  since  it 
represents  only  the  normal  tendency  to  disunion;  the  eruption 
of  domestic  sores  that  formerly  failed  to  come  to  the  surface. 

The  tendency  to  continue  in  the  married  state  is  just  as  great 
as  formerly,  but  the  opportunity  of  escaping  it  is  more  freely 
presented,  so  that  the  increase  in  divorce  does  not  mean  that 
the  family  is  being  undermined,  but  simply  that  those  who 
would,  under  previous  conditions,  have  remained  nominally 
married,  now  separate.  The  discontented  family  is  eliminated, 
so  that  under  present  conditions  the  number  of  contented  fam- 
ilies is  proportionately  larger  than  formerly. 

The  Department  of  Commerce  and  Labor  in  its  report,  "Mar- 
riage and  Divorce,  1887-1906,"  gives  the  total  number  of  mar- 
riages for  the  twenty  years  at  12,832,044,  an  average  of  641,- 
602  marriages  per  year.  In  the  decade  ending  1870,  the  an- 
nual average  of  divorces  was  11,207,  while  in  the  decade  1890- 
1900  the  average  was  55,502.  Thus  of  every  twelve  marriages, 
one  ends  in  divorce. 

A  curious  similarity  in  proportions  may  be  observed  in  that 
one  man  in  twelve  in  New  York  City  is  buried  in  the  potter's 
field.  Thus  what  may  be  termed  potter's  field  marriages  are, 
according  to  the  government  reports,  two  and  one-half  times 
as  great  as  formerly.  The  divorce  rate  annually  per  1,000 
married  couples  is  4,  while  in  1870  it  was  but  1|  per  1,000. 

The  darker  side  of  divorce  is  in  its  influence  on  the  children. 
Differences  between  the  parents  may  be  settled  by  divorce  and 
the  effects  ended,  but  the  effect  on  the  children,  the  future  cit- 
izens of  which  the  state  will  be  composed,  affects  the  state  more 
than  it  does  the  parents. 

On  one  side  the  state  and  the  children,  on  the  other,  the  con- 
tentions of  the  parents,  and  in  a  larger  view  the  interests  of  the 
latter  are  of  less  permanent  consequence. 

The  children  of  divorced  parents  can  have  little  respect  for 
the  parents  they  consider  in  error,  and  respect  for  the  injured 
parent  is  less  than  would  have  been  the  respect  felt  had  no  di- 
vorce occurred.  And  not  only  are  the  children  themselves  af- 
fected, but  their  friends  and  companions  are  infected  with  the 
spirit,  and  a  lack  of  respect  for  parents  is  created,  which  ulti- 
mately shows  itself  in  lack  of  respect  and  discipline  for  all  au- 
thority. 


DOMESTIC  RELATIONS  381 

Parents  in  America  have  less  control  over  their  children  than 
in  perhaps  any  civilized  country.  Parents  allow  their  children 
to  become  "smart"  which  quickly  develops  into  a  disrespectful 
attitude.  The  theory  that  the  rod  hurts  self  respect  of  the  child, 
is  so  widely  held  that  in  the  schools  corporal  punishment  has 
been  abolished.  The  results  are  far  from  gratifying.  Indeed 
the  parents  by  a  too  free  and  too  early  development  of  the  idea 
of  allowing  the  child  to  follow  its  own  sweet  will,  have  lost  all 
discipline,  and  a  condition  of  disrespect,  freshness  and  disobedi- 
ence now  obtains,  both  at  home  and  in  the  school. 

Derelictions,  depredations  and  incivilities  are  excused  by  the 
phrase,  "boys  will  be  boys."  If  this  idea  is  extended,  we  shall 
soon  be  excusing  other  matters  with  the  phrase,  "rowdies  will 
be  rowdies." 

From  insignificant  little  beginnings  of  this  kind,  the  college 
youth  in  all  his  grandeur  takes  his  origin,  who  later  in  his  enthusi- 
asm, both  in  college  and  military  schools,  makes  gentlemen  and 
officers  of  his  fellow  students  by  standing  them  on  their  heads, 
throwing  them  in  pools  of  water,  tying  them  to  railroad  tracks 
and  other  direct  methods,  and  who  also,  as  an  ardent  dramatic 
critic,  frequently  wrecks  theaters  and  finds  himself  incarcerated 
for  a  too  vigorous  style  of  expression. 

Thus  the  discipline  of  the  future  citizen  manifests  itself. 
Under  the  method  followed,  the  individual  comes  to  have  no 
respect  for  himself,  allowing  himself  extravagances  of  all  sorts, 
and  being  obstinate,  self  willed  and  arbitrary,  while  as  a  citizen, 
he  does  not  respect  the  rights  of  others  and  is  otherwise  lawless 
if  not  criminal  and  in  large  bodies  is  of  the  sort  that  makes 
mobs  and  lynchings. 

A  growing  tendency  on  the  part  of  persons  of  means  to  have 
their  children  privately  educated  by  tutors  and  governesses, 
rather  than  in  the  public  schools,  also  has  the  effect  of  lessening 
discipline,  as  there  is  absent  in  such  training  not  only  the  dis- 
cipline of  the  teacher  whose  position  is  independent  of  the  pupil, 
but  also  the  discipline  which  emulation  of  others  enforces. 

The  usually  inadequate  if  not  insignificant  wage  paid  by 
those  who  can  well  afford  to  pay  a  proper  wage  creates  disre- 
spect and  ill  feeling  between  the  parent  and  teacher  as  well  as 
between  teacher  and  child,  making  the  system  one  from  which 
good  results  cannot  be  expected  to  flow.  It  is  in  reality  the  duty 
of  the  state  to  supervise  such  private  education,  and  to  see  that 
only  competent  teachers  are  employed,  teaching  suitable  courses 


382  THE  PRICE  OF  INEFFICIENCY 

and  paid  suitable  salaries.  A  system  of  licensing  private  teach- 
ers should  be  instituted  and  it  should  be  illegal  to  pay  them  less 
than  a  minimum  wage.  It  is  to  the  interest  of  the  state  in  the 
highest  degree  to  see  that  those  who  are  to  be  masters  of  wealth 
should  be  properly  educated  and  not  be  permitted  to  be  held 
aloof  in  such  a  manner  that  their  education,  at  the  hands  of 
governesses  earning  a  few  cents  an  hour  shall  make  them  unfit 
for  the  responsibilities  which  they  must  ultimately  assume,  if 
not  likely  to  use  their  wealth  against  the  interests  of  the  state. 

A  long  and  complicated  train  of  evils  flow  from  divorce.  In 
its  proper  place  it  is  a  useful  remedy  for  worse  conditions,  but 
like  morphine  or  cocaine,  it  is  a  remedy  that  for  a  nation  may 
become  a  noxious  habit. 

As  Supreme  Court  Justice  Benedict,  of  Brooklyn,  remarked 
in  denying  an  application  for  separation  based  on  slight  prov- 
ocation : 

"AVhen  marriage  proves  a  failure  to  persons  who  do  not  look 
upon  it  as  an  obligation  and  duty,  they  are  prone  to  hasten  to 
the  courts  to  obtain  a  dissolution  or  relaxation  of  the  ties  which 
they  voluntarily  assumed,  but  which  their  own  selfishness  has 
rendered  irksome.  Alimony  and  counsel  fees  are  but  poor  sub- 
stitutes for  honor,  love  and  respect,  and  often  serve  to  still 
further  separate  couples  who  should  be  reunited." 

The  disrespect  which  children  show  for  parents,  springing 
thus  from  a  laxity  in  the  relations  of  the  family,  indicates  a 
growth  of  so-called  individuality,  or  a  form  of  selfishness  in 
which  the  sole  object  of  the  individual's  solicitation  is  the  in- 
dividual himself. 

This  spirit  is  very  noticeable  in  America,  and  is  the  basis  of 
divorce  and  the  disrespect  of  children  for  parents;  for  the 
parents  being  selfish  do  not  respect  their  children,  and  breed 
disrespect  in  them  in  this  manner.  Race  suicide,  or  the  dis- 
inclination to  make  personal  sacrifices  for  the  sake  of  children 
is  the  first  disrespect  for  the  child.  So  often  being  undesired 
and  a  burden,  the  child  grows  up  in  an  atmosphere  of  indiffer- 
ence at  least,  and  the  parent  further  will  not  exercise  his  own 
moral  force  to  properly  discipline  the  child,  as  the  disciplining 
of  children  requires  a  certain  exertion  and  stamina  of  character 
which  the  parent  is  too  selfish  or  indolent  to  manifest. 

It  is  easier  to  allow  the  child  to  exercise  its  own  initiative, 
and  then  to  get  rid  of  the  problem  by  sending  it  to  school. 

But  when  an  undisciplined  child  goes  to  school,   in  which 


DOMESTIC  RELATIONS  383 

the  teachers  are  mostly  young,  underpaid  women,  whose  minds 
are  on  any  subject  except  the  disciplining  of  children,  its  con- 
dition is  not  much  improved. 

The  child  sees  in  the  teacher,  an  example  of  a  Avoman  dressed 
as  fashionably  as  her  means  will  permit,  if  not  much  more  so, 
and  as  the  child  has  seen  similar  extravagance  in  the  home,  it 
soon  falls  in  the  way  of  the  rest  of  its  immediate  world,  and  the 
final  result  is  a  superficial  education,  acquired  under  duress  and 
chiefly  for  the  purpose  of  show,  while  a  thorough  digestion  of 
any  subject  is  left  to  somebody  else. 

This  lack  of  thoroughgoing  education  is  largely  responsible 
for  the  numerous  contradictory  characteristics  developed  in  our 
social  organization.  It  makes  the  greatest  difference  in  the 
world  to  the  American  whose  ox  is  gored,  and  whenever  our 
personal  interests  are  touched  our  fine  theories  curl  up  like 
leaves  in  furnace. 

We  are  all  unanimously  in  favor  of  regulating  our  neigh- 
bors, but  are  quick  to  object  to  sumptuary  legislation  when  our 
own  spigot  is  threatened. 

We  boast  of  our  patriotism,  but  we  leave  the  graves  of  our 
great  men  practically  neglected. 

We  claim  that  ours  is  the  land  of  liberty  and  equality,  but 
there  is  no  land  where  there  is  greater  inequality  between  the 
rich. and  the  poor,  and  the  just  and  the  unjust. 

We  are  loud  in  our  praise  of  the  square  deal,  but  it  takes  a 
search  warrant  to  find  anybody  who  ever  got  one. 

We  do  not  permit  teachers  to  use  corporal  punishment  in 
schools,  yet  there  is  no  country  in  which  child  labor  is  so  greatly 
exploited. 

We  object  to  vivisection,  but  we  practice  sterilization. 

We  send  invalids  abroad  for  cures,  but  shut  out  incoming 
health  seekers. 

We  decry  charity,  yet  more  money  is  spent  on  charity  than 
anywhere  else. 

We  seek  after  the  truth,  but  do  not  recognize  it  unless  it  is 
spoken  by  those  of  the  great  names. 

We  proclaim  the  dignity  of  the  law,  but  the  small  culprit 
has  a  hundred  chances  of  going  behind  the  bars  to  the  financier 's 
one. 

We  organize  cat  and  dog  cruelty  prevention  societies,  yet  we 
murder  more  human  beings  in  traffic  and  the  industries  than 
any  other  civilized  nation. 


THE  PRICE  OF  INEFFICIENCY 

imultiply  eugenic  clubs,  yet  nowhere  is  race  suicide  so 
|nt. 

We  are  quick  to  criticize,  but  pray  to  be  delivered  frona 
"knockers"  and  ''cranks." 

We  champion  individualism,  yet  we  permit  numberless  trusts 
and  labor  unions  whose  principal  purpose  is  to  stifle  individual- 
ism. 

"We  think  we  are  leading  the  world,  but  it  only  appears  so 
because  we  have  almost  lost  a  lap. 

We  shout  for  arbitration  of  the  disputes  of  Europe,  but  we 
are  only  too  anxious  to  sidestep  the  Hague  when  it  comes  to 
our  own  propositions. 

Altogether  we  have  a  most  admirable  comprehension  of  what 
others  should  do  to  improve  our  own  lot,  but  very  little  enthusi- 
asm for  improving  the  lot  of  others. 


CHAPTER  XXV 
EDUCATIONAL  SYSTEMS 

The  well  springs  of  education — How  nations  determine  their  own  destinies 
— The  materials  of  citizenship — Remarkable  educational  system  of 
Germany — The  salient  features  of  the  system — Why  it  produces  good 
citizens — German  discipline — Respect  for  authority — The  well  organ- 
ized army  and  the  Avell  organized  home — Failure  of  American  educa- 
tional system  to  definitely  train  character — Being  taught  how  to  play 
in  Germany — German  and  American  methods  of  production — The 
great  benefits  of  the  continuation  school — Course  of  study — How 
adapted  to  individual  trades — Historic  aspect  of  German  school  sys- 
tem— The  famous  classical  universities — The  modern  technical  uni- 
versities— Thorough  conuiiercial  training — Germany's  army  of  scientists 
and  engineers — Details  of  the  technical  educational  system — What 
standing  has  the  American  engineer? — The  university  system  which 
produces  original  work — Flood  of  scientific  books  in  Germany — ^Tlie 
conditions  which  make  them  twice  as  numerous  in  Germany  as  in 
the  rest  of  the  world  combined — Groat  success  of  Germans  in  winning 
Nobel  prizes — The  plan  of  exchange  professorships. 

The  state,  being  composed  of  its  citizens,  is  a  resultant  of 
what  its  citizens  are.  It  can  rise  no  higher  than  its  source,  and 
the  nation  will  always  be  what  its  citizens  make  it. 

But  the  state,  as  a  whole,  guided  by  the  wisdom  of  its  wisest 
citizens,  controls  its  own  destiny  and  progress,  in  that  it  can  in- 
fluence and  form  the  character  of  its  future  citizens  as  it  will. 

The  fate  of  a  nation  thus  depends  on  what  it  makes  of  the 
raw  material  of  citizenship  which  humanity  provides,  and  the 
great  progress  which  Germany  has  made  in  the  last  half  cen- 
tury is  due  particularly  to  the  influences  which  have  surrounded 
the  children  who  have  grown  to  be  the  citizens  of  which  the 
nation  is  now  composed;  while  the  failure  of  other  countries  to 
equal  her  progress,  if  they  have  not  fallen  behind,  has  been  due 
to  failure  to  utilize  to  the  highest  degree  the  materials  of  citi- 
zenship. 

This  is  most  acutely  evident  in  the  case  of  England,  which 
has  finally  been  forced  to  adopt  plans  of  social  improvement, 
such  as  pension  and  insurance  systems,  after  they  have  been  in 
force  in,  Germany  for  a  generation. 

385 


386  THE  PRICE  OF  INEFFICIENCY 

England  having  been  content  merely  to  build  Dreadnaughts 
and  heavy  ordnance,  now  finds  that  Germany  is  fortified  with 
an  unrivaled  educational  system,  among  the  fruits  of  which  are 
the  ability  to  design  and  construct  engines  of  war  of  much 
higher  efficiency  while  her  trade  mechanisms  are  such  that  she 
readily  outdistances  other  nations.  She  has  built  her  success 
upon  the  impregnable  foundations  of  education  and  is  thus  a 
generation  ahead  of  all  her  competitors. 

England  sees  itself  now  forced  to  begin  a  nation-wide  cam- 
paign of  education  after  realizing  her  disastrous  defeat,  at  a 
cost  of  millions  of  money  annually,  in  competition  with  other 
advanced  nations,  particularly  Germany.  It  would  be  the  part 
of  wisdom  for  England  to  model  her  educational  undertakings 
on  the  lines  which  have  proven  so  successful  for  Germany. 

The  statistics  of  illiteracy  of  the  leading  nations  of  the  world 
show  at  a  glance  the  unrivaled  results  of  the  German  system. 

The  number  of  illiterates  per  10,000  of  population  is  as  follows : 

Russia 6170  in  10,000  or  61% 

Italy    3130  in  10,000  or  31% 

Austria-Hungary   .2570  in  10,000  or  25% 

Belgium 1020  in  10,000  or  10% 

United   States 770  in  10,000  or     7% 

France     400  in  10,000  or     4% 

Great   Britain 100  in  10,000  or     1% 

Denmark 20  in  10,000  or  one-fifth  of  1% 

Sweden    10  in  10,000  or  one-tenth  of  1% 

Grermany     5  in  10,000  or  one-twentieth  of  1% 

Thus  it  appears  that  proportionately  there  are  twenty  times 
as  many  illiterates  in  Great  Britain  and  one  hundred  and  fifty- 
four  times  as  many  in  the  United  States  as  in  Germany. 

It  will  be  noticed  that  Austria-Hungary  has  a  very  large  pro- 
portion of  illiterates.  This  is  due  to  the  Slavonic  element  of 
tlie  population,  mostly  found  in  the  southeastern  portion,  the 
northern  or  Germanic  part  of  Austria  having  a  very  low  per- 
centage of  illiterates.  Practically  all  the  Slavonic  and  allied 
races  show  a  high  degree  of  illiteracy.  Among  the  smaller 
countries,  the  figures  are  as  follows:  Bulgaria,  52.7%;  Servia, 
61.6%  ;  Rumania,  75%,  while  other  Balkan  states,  Turkey  and 
semi-oriental  districts,  from  which  we  expect  large  immigration 
in  the  near  future,  are  even  more  illiterate.  Such  enormous  in- 
flux will  debase  still  further  our  national  standards  which  have 
suffered  so  much  already  from  the  uneducated  hordes  which 


EDUCATIONAL  SYSTEMS  387 

have  come  out  of  lower  Russia.  The  principle  of  exclusion 
which  has  proven  so  valuable  on  our  Pacific  shores  must  he  ap- 
plied to  the  Atlantic  seaboard  if  we  are  not  to  be  submerged  in 
this  flood  of  undesirables.  The  danger  of  the  yellow  peril,  to 
the  gravity  of  which  our  brothers  in  the  west  had  so  much  diffi- 
culty in  arousing  the  country,  is  now  duplicated  along  the  Atlan- 
tic by  a  peril  out  of  the  near-East  no  less  menacing  and  far  more 
insidious  because  appealing  in  a  way  characteristic  of  the  races, 
for  sympathy  and  succor  from  oppression.  It  is  w^ell  to  care  for 
the  lepers  of  ignorance,  to  afford  them  their  measure  of  relief  and 
justice,  but  it  is  not  well  to  contaminate  ourselves  in  the  process. 

The  educational  system  of  Germany  is  simple,  thorough,  and 
of  the  highest  efficiency.  It  is  controlled  by  the  government, 
through  a  ministry  of  education  at  Berlin,  and  subordinate 
boards  in  the  various  states,  and  it  is  thus  a  single  organization 
unit.  Control  of  education  throughout  Germany  thus  being 
vested  in  a  single  source  of  authority,  there  is  no  conflict  of 
authority  and  no  disproportionate  results. 

The  salient  features  which  make  the  German  educational  sys- 
tem what  it  is  under  this  central  system  of  control  and  super- 
vision are  principally  discipline,  the  interests  of  the  students 
in  their  work,  ethical  instruction,  thoroughness  and  the  utili- 
zation of  the  knowledge  gained. 

The  ideal  of  German  education  is  to  make  the  individual  a 
good  citizen,  to  teach  him  that  his  duty  is  towards  the  state 
rather  than  to  himself,  German  education  has  thus  in  view 
the  creation  of  an  efficient  state,  rather  than,  as  in  America,  the 
development  of  the  individual  as  an  individual.  This  ideal  is 
expressed  in  the  motto,  "Alle  filr  Ein,  Bin  filr  Alle,"  that  is, 
"All  for  one  and  one  for  all." 

As  a  matter  of  fact  in  making  the  individual  a  good  citizen 
it  is  first  necessary  to  make  him  a  good  individual,  so  that  in 
principle,  the  German  ideal  is  that  of  applied  individualism. 
The  creation  of  an  efficient  state  can  only  follow  the  creation  of 
efficient  citizens. 

German  industrial  progress  is  also  a  matter  of  education.  To 
support  65,000,000  people  on  an  area  less  than  two-thirds  the 
size  of  Texas,  a  population  increasing  by  900,000  a  year  requires 
the  utmost  economic  and  social  foresight.  The  exercise  of 
Spartan  principles  and  Prussian  drill  is  necessary,  leadership 
of  the  highest  quality,  skill  and  discipline,  all  are  requisite  to 
cope  with  the  necessity. 


388  THE  PRICE  OF  INEFFICIENCY 

With  greater  natural  resources,  Germany  would  probably 
be  less  advanced  than  to-day,  as,  for  nations  like  individuals, 
too  rich  a  heritage  is  likely  to  prove  demoralizing. 

German  discipline  is  a  national  trait.  It  is  one  of  the  springs 
of  character  of  the  race,  and  it  manifests  itself  at  the  outset 
of  the  child's  career,  where  in  the  home,  a  condition  of  disci- 
pline prevails  that  would  seem  harsh  and  unnecessary  to  an 
American.  But  in  after  years,  if  not  at  the  time,  the  child  ap- 
preciates the  great  value  this  discipline  has  been  to  him,  and 
continues  the  heritage  to  the  next  generation.  For  Americans 
to  acquire  anything  like  German  discipline,  is  doubtless  an  im- 
possibility, even  if  desirable.  Each  people  has  its  own  traits. 
Strict  discipline  is  not  and  is  never  likely  to  be  an  American 
trait,  though  all  Americans  freely  admit  that  more  discipline 
would  be  a  better  thing  for  them.  Yet  they  take  no  particular 
steps  towards  that  end. 

Discipline  is  obedience  to  orders,  and  as  repetition  gams 
facility,  discipline  is  more  or  less  a  matter  of  drill,  of  continued 
practice,  and  this  drill  is  one  of  the  keynotes  of  German  educa- 
tional success. 

As  pointed  out  by  the  late  Louis  J.  Magee,  a  prominent  engi- 
neer and  organizer,  familiar  with  German  conditions,  in  the 
Engineering  Magazirie: 

''Another  element  which  makes  for  efficiency  in  German  life 
and,  of  course,  plays  a  great  role  in  the  school  routine,  is  dis- 
cipline.    The  average  German  is  certainly  not  more  mentally 
alert  or  convincing  than  an  American  in  an  analogous  position. 
But  the  national  attitude  of  mind  is  friendly  to  order,  clearness, 
organization  and  precision.     Germans   are   taught   respect  for 
existing  arrangements;  the  subordination  of  the  member  to  the 
body;  regard  for  duly  constituted  authority  as  designated  in 
rank   and  title.     This  comes  somewhat  from  military  regime; 
but  long  before  Germany  had  a  well  organized  army,  it  had  a 
well  organized  home.     The  child's  obedience  to  its  father  came 
first  of  all.     The  child  is  not  only  punished  for  disobedience, 
but  is  trained  in  a  certain  code  of  manners  and  correctness  of 
formality  which,  under  similar  conditions,  our  children  are  ex- 
pected to  pick  up  for  themselves.     Such  training  may  not  pre- 
vent  the   subject  from  becoming  a  boor,   but  it  will  lay  the 
foundation   for   system;   obedience   to   the  orders   of  the   next 
above,   obedience  to  the  laws.     This  produces  a  normal  type. 


EDUCATIONAL  SYSTEMS  389 

It  may  interfere  with  individuality,  but  it  does  not  seem  to 
hurt  the  intellect  or  weaken  the  energies. 

After  discipline,  a  feature  that  is  an  outgrowth  of  ancient 
customs  is  a  powerful  factor  in  German  educational  success. 
Not  less  than  two  hours  a  week  are  devoted  to  religious  instruc- 
tion in  the  schools  of  all  classes. 

In  older  times,  the  schools  were  founded  for  no  other  pur- 
pose, and  the  present  allotment  of  time  is  a  persistence  of  that 

custom. 

To  an  American  the  teaching  of  religion  m  the  schools  would 
seem  an  impossible,  if  not  an  astonishing  condition.  ^  It  would 
be  utterly  repugnant  to  a  large  portion  of  the  most  intelligent 
of  the  community  who  have  no  longer  any  religious  beliefs. 
The  separation  of  church  and  state  is  a  cardinal  principle  of 
American  institutions. 

In  effect,  however,  the  German  system  accomplishes  the  same 
result,  as  far  as  those  believing  in  religion  is  concerned,  and 
there  are  great  contributory  advantages.  The  school  buildings 
are  apportioned  according  to  the  religion  of  the  parents  into 
Protestant,  Catholic  and  Hebrew,  and  each  receives  its  two 
hours  of  weekly  religious  instruction  from  a  minister  of  its  own 
faith,  one  competent  to  give  the  instruction  best  suited  to  the 

conditions. 

These  ministers  teach  religion  in  the  schools,  just  as  the  pro- 
fessors teach  mathematics,  and  the  German  youth  thus  acquires 
a  moral  training  as  well  as  an  academic  one.  In  America  this 
is  left  to  the  discretion  of  parents,  but  as  church  going  is  very 
laxly  observed  by  Americans  and  as  the  Sunday  schools  are 
not  attended  by  a  class  of  boys  most  in  need  of  instruction  of 
an  ethical  nature,  the  result  is  that  the  great  majority  of  Amer- 
ican citizens  have  grown  to  man's  estate  without  any  definite 
training  of  character.  Thus  their  lines  of  duty  toward  the  state 
are  unformed,  and  they  raise  no  protest  against  graft  and  in- 
efficiency in  the  government.  They  are  citizens  made  at  hap- 
hazard, and  their  patriotism  begins  and  ends  with  applause  in 
theaters  when  a  national  air  is  played  or  a  flag  waved  by  some 
cheap  comedian. 

The  results  of  the  German  plan  prove  the  great  superiority 
of  a  system  which  forms  character  as  well  as  habits  of  study. 

A  system  of  religious  instruction  would  be  difficult  to  apply 
in  America  owing  to  the  three  hundred  and  odd  religions  in 


390  THE  PRICE  OF  INEFFICIENCY 

vogue,  most  of  them  promulgated  by  hairbrained  fanatics  for  in- 
terested reasons.  The  Americans,  however,  though  showing  such 
a  diversity  in  religions  are  practically  united  in  the  worship  of 
a  single  constitution  originated  by  theorists  and  never  an  instru- 
ment deserving  any  considerable  part  of  the  respect  it  inspires. 
The  Christian  religion,  the  result  of  centuries  of  development  at 
the  hands  of  the  cleverest  men  the  world  has  ever  produced,  and 
destined  to  endure,  is  by  the  numbers  of  its  competitors  in 
America  seen  to  receive  far  less  unanimous  support  than  the  con- 
stitution, the  work  of  a  few  cursory  experimenters,  which  they 
supposed  was  constructed  to  last  indefinitely,  but  which  it  is 
now  seen  must  give  way  to  a  better  system. 

The  system  of  religious  instruction,  together  with  the  dis- 
cipline and  home  training,  gives  the  German  child  an  extremely 
different  point  of  view  in  regard  to  its  school  work.  Greater 
willingness  to  study  is  seen  and  the  lesson  is  learned  from  a  de- 
sire to  know  it  rather  than  merely  as  a  task  to  be  gotten  through 
with  as  quickly  as  possible. 

German  thoroughness  is  another  foundation  of  the  school 
system.  This  is,  to  a  certain  extent,  a  trait  of  character  too,, 
but  it  is  also  a  system.  The  child  at  play  is  instructed  in  the 
best  ways  of  playing,  and  this  attention  to  detail  permeates  the 
whole  system.  When  he  is  graduated  in  any  department,  the 
German  knows  that  department  thoroughly. 

All  this  has  not  been  accomplished,  however,  without  develop- 
ment and  reforms,  and  perfection  has  by  no  means  been  at- 
tained, but  the  German  system  is  to-day  being  copied  all  over 
the  world,  and  is  the  model  referred  to  when  any  proposed 
changes  are  under  discussion  anywhere.  Of  a  former  defect  of 
German  education,  the  limited  number  of  brilliantly  educated 
men,  with  no  intermediately  educated  class,  another  quotation 
may  be  taken  from  Mr.  Magee's  article: 

"It  is  everyAvhere  evident  that  the  Germans  are  no  longer 
satisfied  with  a  few  hundreds  of  famous  scholars,  a  few  thou- 
sands of  professional  men — and  then  a  drop  almost  down  to  the 
three  Rs.  They  are  wisely  grading  off  their  material.  They 
have  many  different  standards  as  to  what  constitutes  an  edu- 
cated man.  Then  they  try  for  99%  efficiency  under  whatever 
standard  the  subject  may  properly  belong.  Even  housemaids, 
butlers  and  chimney  sweeps  may  receive  in  special  schools  all 
the  correct  fundamental  preparation  for  their  humble  careers." 

A  feature  of  German  educational  methods,  of  the  greatest 


EDUCATIONAL  SYSTEMS  391 

importance,  is  the  utilization  of  the  education  received  and  the 
connection  made  between  school  and  work.  The  average  Amer- 
ican boy  gets  a  certain  amount  of  education,  and  then  is  turned 
out  to  shift  for  himself,  while  the  principal  use  he  makes  of  his 
education  is  to  forget  as  much  of  it  as  possible  as  soon  as  he 
can. 

The  German  system  does  not  abandon  the  boy  when  he  leaves 
school,  but  keeps  in  step  with  him,  continuing  his  education 
until  he  has  mastered  some  means  of  earning  a  livelihood. 

TV.  H.  Dooley  in  "Geraian  and  American  Methods  of  Pro- 
duction," in  the  Atlantic  Monthly  of  May,  1911,  describes  the 
sj'stem. 

"The  average  American  thinks  that  the  success  of  Germany 
is  due  to  low  wages  and  long  hours  of  work.  This  is  not  true, 
for,  if  labor  is  cheaper  there,  coal  is  dear,  machinery  dearer  and 
imported  raw  material  pays  a  tax.  The  industrial  supremacy 
of  Germany  is  the  effect  of  definite  and  deliberate  political 
action.  Thirty  years  ago  the  German  statesmen  realized  that 
the  nation  was  inferior  to  the  American  and  English  in  natural 
resources  and  natural  ingenuity;  this  inferiority  forced  upon 
their  attention  the  value  of  thrift  and  of  education,  and  thrift 
was  multiplied  by  capital  and  education  multiplied  by  industrial 
efficiency. 

* '  The  German  government  has  solved  its  educational  problems 
in  a  more  satisfactory  way  than  any  other  country.  According 
to  their  scheme  of  education,  every  worker  in  a  profession,  trade 
or  commercial  pursuit,  must  have  not  only  a  general  education, 
but  technical  preparation  for  the  particular  work  selected  by 
him.  In  the  United  States  we  believe  in  the  same  policy,  but 
apply  it  to  those  entering  the  professions  only,  disregarding  the 
great  mass — 95% — that  leave  school  at  fourteen. 

"Germany  insists  that  every  child  be  under  educational  in- 
fluence till  the  age  of  eighteen.  The  child  leaves  the  common 
school  at  fourteen.  He  may  go  to  work,  to  a  higher  school  and 
prepare  for  college,  or  to  a  technical  school.  In  America  he 
may  leave  school  at  fourteen  and  is  not  obliged  to  attend  any 
other  school. 

"The  Germans  act  on  the  principle,  admitted  by  everybody 
who  knows  or  cares  anything  about  education,  that  the  way  to 
secure  a  good  training  for  the  mind  is  not  to  end  the  school 
life  at  the  most  plastic  period,  fourteen  years  of  age,  or  in  the 
case  of  foreigners  as  soon  as  they  can  pass  an  examination,  but 


392  THE  PRICE  OF  INEFFICIENCY 

to  insist  that  every  boy  shall  spend  a  certain  number  of  hours 
a  week  under  educational  training  and  sound  teaching  until  he 
reaches  manhood.  There  is  less  "cramming"  and  instruction 
is  slower,  more  thorough,  more  reasoned,  than  it  can  be  under 
our  American  system  of  hurrying  children  through  the  school. 
For  we  must  remember  that  our  young  men  in  industrial  plants 
are  nothing  more  than  mere  machines;  they  exercise  no  in- 
dependent thought  any  more  than  the  spinning  frames  or  the 
machine  lathes,  and  the  result  is  that  they  become  deadened. 

"The  German  government  supports  continuation  schools, 
called  ForUldungs  Schule  (go  on  building)  for  boys  above 
fourteen  to  continue  their  instruction  after  leaving  the  regular 
day  schools.  Attendance  upon  this  school  is  obligatory  in  most 
places  for  the  boy  until  he  is  eighteen  years  of  age.  The  weekly 
period  of  instruction  is  ten  hours,  of  which  three  hours  come  on 
Saturday  morning  from  9  to  12  o'clock,  and  three  hours  each 
on  two  work  days,  from  9  to  12  in  the  morning,  or  from  4  to 
7  in  the  afternoon.  This  arrangement  of  hours  can  be  changed 
to  suit  the  needs  of  the  employer.     No  instruction  is  given  after 

7   P.M. 

' '  The  instruction  is  adapted  to  the  needs  of  the  various  trades. 
There  are  classes  in  arithmetic  for  machinists,  loom  fixers,  etc. 
The  terms  used  in  the  class  room  savor  of  the  shop  and  the  mill. 
What  is  three-fourths  of  25^  does  not  mean  so  much  to  the 
foundry  man  as  a  problem  like  this :  If  a  copper  casting  weighs 
25|  pounds  and  the  specific  gravity  of  iron  is  three-fourths  that 
of  copper,  what  will  the  casting  weigh  if  made  of  iron?  Then 
again,  the  same  problem  would  not  interest  the  textile  worker, 
unless  it  involved  mill  calculations.  Working  people  have 
minds  of  a  distinctly  concrete  order.  They  have  intensely  prac- 
tical aims  wlien  they  come  to  school,  and  are  unwilling  to  study 
systematically  an  entire  subject  as  they  did  in  the  common 
schools.  They  demand  that  the  instruction  shall  lead  directly 
to  the  specific  things  tliey  are  dealing  with  in  their  work.  The 
German  continuation  school  adapts  its  methods  of  instruction 
to  meet  the  needs  of  the  working  people. 

"To  give  an  illustration — the  Munich  Continuation  School 
for  Machinists'  Apprentices  offers  the  following  subjects:  Re- 
ligion, maoliine  shop  calculations  and  bookkeeping,  business 
correspondence  and  reading,  the  study  of  life  and  citizenship, 
mechanical  drawing,  physics  and  machinery,  materials  and 
shop  work.     The  subjects  of  instruction  are  in  the  closest  possi- 


EDUCATIONAL  SYSTEMS  393 

ble  connection  with  the  requirements  of  the  machinists'  trade." 

The  distinguishing  characteristics  of  the  German  educational 
system  may  be  summed  up  in  the  word  efficiency.  To  obtain 
the  greatest  amount  of  benefit  possible  to  be  obtained  in 
the  objective  and  central  control,  discipline,  willingness  of  the 
pupil,  ethical  instruction,  thoroughness  and  continuity  are  the 
features  most  in  contrast  as  compared  with  the  American  sys- 
tem. 

The  German  system  to  be  thoroughly  understood  and  appre- 
ciated, needs  to  be  described  in  some  detail,  but  particular  com- 
parisons with  the  American  system  need  not  be  carried  out  as 
the  latter  is  well  understood.  In  order  to  understand  the  pres- 
ent status  of  the  highly  developed  German  system,  a  short  his- 
torical review  of  its  origin  and  gradual  growth  is  necessary, 
and  the  following  matter  from  the  author's  article,  "The 
Educational  System  of  Germany,"  which  appeared  in  Amey-i- 
can  Education,  May,  1911,  covers  the  ground  in  a  condensed 
form. 

' '  The  Christian  religion  preserved  the  ancient  culture  through 
the  dark  ages,  during  which  the  church  w^as  the  only  provider 
of  education.  It  was  but  natural  that  great  weight  should  be 
laid  upon  the  teaching  of  religion,  and  in  fact  at  the  very  be- 
ginning the  object  of  teaching  was  to  spread  religion.  The  lan- 
guage of  the  monks  was  Latin  and  consequently  Latin  w^as  the 
medium  through  which  all  education  was  to  be  obtained. 

"The  13th  and  14th  centuries  brought  about  a  change  from 
clerical  to  worldly  methods  due  to  the  development  of  cities,  the 
prosperity  following  in  the  wake  of  commerce  and  trade,  and 
the  power  and  influence  of  the  citizens.  "With  this  increase  in 
importance  of  citizenship  and  the  growi;h  of  these  communities, 
the  necessity  of  town  schools  was  felt,  and  these  were  established 
on  the  lines  of  the  cloister  schools  for  preliminary  education 
only,  but  in  the  long  run  did  not  satisfy  the  demand  for  educa- 
tion, so  that  Latin  was  altogether  abolished  and  the  German 
language  and  alphabet  took  its  place  for  public  and  business 
education. 

"This  may  be  considered  as  the  foundation  of  the  common 
schools  of  Germany,  Naturally,  after  the  establishment  of  this 
educational  system,  the  demand  for  higher  education  was  bound 
to  come.  This  desire  was  largely  influenced  by  Luther's  trans- 
lation of  the  Bible  into  German,  Guttenberg's  invention  of  the 
printing  press  and  the  general  advancement  of  science.     The 


394  THE  PRICE  OF  INEFFICIENCY 

realization  of  higher  education  was  marked  by  the  founding  of 
the  University  of  Leipzig  in  1409.  As  the  preliminary  educa- 
tional system  resulted  in  the  foundation  of  universities,  so  the 
universities  on  the  other  hand,  influenced  betterments  in  the  pre- 
paratory methods. 

"Compulsory  education  was  now  suggested  and  finally  the 
state  took  in  hand  all  matters  of  education  and  this  was  the  be- 
ginning of  the  system  of  general  higher  education  which  led  to 
the  establishment  of  the  present  Gymnasium,  which  long  held 
sway  as  a  preparatory  school  for  the  university. 

"It  is  endeavored  herein  to  outline  the  courses  of  study  as 
provided  by  law  as  a  standard.  It  would,  however,  not  be  within 
the  scope  of  this  article  to  discuss  the  educational  system  as  a 
whole  with  all  its  additions  such  as  excursions  to  the  woods,  to 
the  country,  to  museums,  etc.,  in  the  lower  schools;  special 
classic  performances  in  leading  theaters  for  the  middle  schools; 
or,  for  instance,  educational  tours  of  a  duration  of  ten  or  more 
days  for  the  university.  Neither  shall  much  be  said  of  the  sys- 
tem prevailing  at  the  universities,  which  allows  the  student  to 
attain  his  education  at  as  many  universities  as  he  wants  to,  thus 
giving  him  the  advantage  of  hearing  lectures  by  the  different 
prominent  professors  on  the  different  subjects. 

"In  consequence  of  the  rapid  advancement  of  science  and  the 
desire  for  further  research,  the  theories  of  the  ancients  were 
not  so  strictly  accepted,  and  recourse  was  had  to  the  universities, 
to  independent  thought,  and  to  the  investigation  of  natural  phe- 
nomena. Copernicus,  Galileo,  Kepler  and  Newton  had  already 
advanced  their  new  theories;  Columbus,  Vasco  de  Gama,  and 
jMagellan  through  their  discovery  of  new  worlds,  had  widened 
the  scope  of  vision  and  Ratke  and  Comenius  worked  out  theories 
for  teaching  from  a  new  point  of  view,  which,  however,  coald 
not  immediately  be  put  into  effect  because  of  the  unrest  conse- 
quent upon  the  30  years  war. 

' '  Frederick  Wilhelm  I  of  Prussia,  in  1717,  finally  inaugurated 
the  system  of  compulsory  education,  and  founded  2,000  new 
schools.  In  1794,  the  general  law  of  the  state  laid  down  fixed 
rules  for  the  entire  system  of  Prussian  schools.  The  following 
are  a  few  paragraphs  which  may  illustrate  its  nature: 

''Paragraph  1.  Schools  and  universities  are  state  institutions 
which  have  in  view  the  teaching  of  young  people  in  useful 
knowledge  and  science. 

"Paragraph  9.     All  public  schools  and  educational  institu- 


EDUCATIONAL  SYSTEMS  395 

tions  shall  be  under  the  direct  supervision  of  the  state,  and  are 
subject  to  visitations  and  inspections  at  all  times. 

"Paragraph  29.  Where  no  endowTnents  exist  for  a  public 
school,  the  expense  of  the  institution  must  be  borne  by  all  the 
male  heads  of  households  regardless  of  the  number  of  children 
which  each  family  may  have. 

"Paragraph  34.  The  cost  of  maintenance  of  school  buildings 
and  dwellings  for  teachers  must  be  borne  by  the  inhabitants  of 
the  district  as  a  common  burden. 

"Paragraph  43.  Every  inhabitant  who  is  not  able  or  does 
not  care  to  employ  private  tutors  for  his  children,  must  send 
them  to  the  public  schools  when  they  have  attained  the  age  of 
5  years. 

"Paragraph  46.  Instruction  must  be  continued  until  the 
child,  in  the  opinion  of  the  school  authorities,  has  acquired  that 
knowledge  which  the  average  sound  minded  individual,  accord- 
ing to  his  or  her  standing,  is  supposed  to  have. 

"Paragraph  50.  The  exactions  of  compulsory  education 
must  not  interfere  with  the  health  of  the  pupil  so  that  it  might 
in  any  sense  become  dangerous  to  his  well  being. 

"The  business  and  professional  men,  the  artists  and  the  arti- 
sans in  the  early  part  of  the  19th  century  already  felt  the  need 
of  a  higher  public  education  due  to  the  rapid  development  of 
industry  and  technique,  and  a  school  was  established  called  the 
Real  Gymnasium  which  ranks  with  the  gymnasium  as  a  scien- 
tific school  and  which  lays  special  stress  on  modern  languages, 
mathematics  and  natural  science, 

"Through  the  efforts  of  the  great  pedagogue,  Johann  Hein- 
rich  Pestalozzi,  in  the  first  half  of  the  19th  century,  the  public 
school  took  its  proper  position,  inasmuch  as  it  became  its  prov- 
ince not  only  to  teach  the  necessary  elementary  branches  but 
also  to  awaken  the  spiritual  forces  of  the  pupil  so  that  indepen- 
dent, confident  and  logical  action  might  result.  To  relieve  the 
strain  which  was  put  on  the  pupil  by  his  spiritual  education,  he 
introduced  the  now  highly  developed  system  of  gymnastic  exer- 
cises. The  pupil  of  Pestalozzi,  Frederich  Froebel,  founded 
the  "Kindergarten"  system  which  now  is  known  the  world 
over. 

"Upon  the  establishment  of  the  present  German  Empire  in 
1871,  the  entire  school  system,  and  particularly  as  applied 
to  the  common  school  (Volks  Schule  and  Buerger  Schule)  was 
again  improved  and  in  1872  Prussia  regulated  the  educational 


396  THE  PRICE  OF  INEFFICIENCY 

system,  and  among  other  things  introduced  an  intermediate 
school,  which  is  an  extension  of  the  Volks  Schule.  In  this  inter- 
mediate school,  or  Mittel  Schule,  one  foreign  language,  additional 
mathematics,  and  some  of  the  Real  Gymnasium  branches  are 
taught.  Consequently  Germany  now  possesses  the  following 
educational  institutions : 

''Volks  Schule  (no  tuition)  or  Buerger  Schule  (with  tuition 
fees),  Mittel  Schule,  Real  Schule,  Ober  Real  Schule,  Real  Gym- 
nasium, Gymnasium  and  Universitat. 

These  schools  may  be  divided  into  three  categories:  The 
lower  school  system,  the  upper  school  system  and  the  univer- 
sities. 

''The  system  of  lower  education  comprises  the  Volks  Schule, 
Fortbildung  Schule  and  the  Mittel  Schule. 

"The  compulsory  education  law  requires  that  the  child  enter 
the  school  in  the  calendar  year  in  which  it  reaches  the  age  of 
six  years  and  continues  through  a  training  of  at  least  eight 
years  of  schooling. 

"The  Volks  Schule  and  Buerger  Schule  comprise  eight  terms 
of  one  year  each,  aggregating  from  22  to  32  hours  of  study  per 
week.  During  the  first  period,  religion,  German,  arithmetic, 
singing  and  gymnastics  are  taught,  in  the  second  period,  draw- 
ing and  object  lessons  are  added,  and  in  the  third  period  geom- 
etry', history  and  physics. 

"The  Mittel  Schulen  or  intermediate  schools  are  intended  for 
such  pupils  who  desire  a  somewhat  higher  education  than  can 
be  had  in  the  Volks  Schulen  and  who  expect  to  better  fit  them- 
selves for  industrial  and  commercial  life.  Such  schools  continue 
six  terms  of  one  year  each,  subsequent  to  the  first  three  years 
of  the  Volks  Schule.  The  course  of  study  during  the  first 
year,  to  which  24  hours  per  week  are  devoted,  covers  religion, 
German,  arithmetic,  singing  and  gymnastics.  To  these  are 
progressively  added  geometry,  botany,  physics,  geography,  his- 
tory, French  or  English  and  drawing,  so  that  finally  during  the 
last  term,  32  hours  per  week  are  devoted  to  this  list. 

"It  must  further  be  noted  that  there  are  a  number  of  city 
schools,  particularly  in  the  industrial  districts,  in  which  the 
courses  of  the  studies  embrace  a  combination  of  those  of  the 
Volks  Schule  and  Mittel  Schule.  In  order  to  equalize  the  edu- 
cational advantages  as  between  the  pupils  of  the  upper  and 
lower  classes,  all  cities  and  many  large  towns  are  provided  by 
the    communities   with   so-called    Fortbildungs  Schulen,    which 


EDUCATIONAL  SYSTEMS  397 

constitute  an  extension  of  the  Mittel  Sehulen  and  in  which  Ger- 
man composition,  arithmetic,  mathematics,  physics  and  draw- 
ing are  taken  up,  and  also  such  branches  as  enable  the  pupil 
to  better  follow  commercial  and  industrial  pursuits.  Two  to 
four  hours  per  day  and  two  or  three  days  per  week  are  devoted 
thereto,  and  the  course  extends  over  a  period  of  three  to  four 
years. 

"In  order  that  graduates  from  the  last  named  schools  may 
later  in  life  be  enabled  to  acquire  additional  instruction  of  a 
higher  order,  the  so-called  Volks  Hoch  Sehulen  were  established 
in  1898,  in  which  lectures  were  given  during  several  months 
of  the  3^ear,  principally  in  the  larger  cities.  The  course  of  study 
at  the  Berlin  Hoch  Schule  for  instance  comprised  the  following 
lectures  for  the  year  1900,  viz: 

' '  On  the  effects  of  the  newer  remedies  and  drugs ;  on  the  con- 
stitution of  the  universe;  the  prevention  of  sickness  in  daily 
life;  Greek  sculpture;  on  germs,  causes  of  disease  and  its  pre- 
vention; our  atmosphere  and  its  compositions;  the  origin  and 
prevention  of  nervous  diseases;  the  earth  and  its  history;  the 
life  and  works  of  Goethe. 

''This  is  a  six  weeks'  course  for  which  a  nominal  fee  of  one 
mark  (25  cents)  per  evening  is  charged.  Two  thousand  at- 
tended this"  course.  At  another  course  in  Leipsig,  the  attend- 
ance was  10,000. 

"Similar  courses  of  study  are  provided  for  in  country  dis- 
tricts and  which  usually  extend  through  a  period  of  five  months 
for  men  and  three  months  for  women.  In  these  schools,  the 
subjects  taken  up  vary  from  year  to  year. 

"The  system  of  higher  education  comprises  the  Gymnasium, 
the  Real  Gymnasium,  the  Ober  Real  Gymnasium,  Reform 
Schule,  Real  and  Hoehere  Buerger  Schule.  These  constitute 
two  groups,  the  Gymnasiums  and  the  Real  Sehulen.  The  dis- 
tinction between  the  two  groups  is  as  follows: 

"The  Gymnasium  group  comprises  the  Gymnasium  and  the 
Ober  Real  Sehulen,  in  all  of  which  the  courses  extend  over  a 
term  of  nine  years  and  differ  only  in  that  in  the  Gymnasium, 
Greek  and  Latin  is  taught,  in  the  Real  Gymnasium  Greek  and 
Latin  are  omitted  and  French  and  English  substituted  and  in 
the  Ober  Real  Schule  these  modern  languages,  additional  mathe- 
matics and  natural  science  are  substituted  for  Greek  and 
Latin. 

"The  Real  Sehulen  group  comprises  the  Real  Schule,  the  Re- 


398  THE  PRICE  OF  INEFFICIENCY 

form  Schule,  and  the  Hoehere  Buerger  Schule,  which  all  cover 
a  six  years'  course. 

' '  The  courses  of  study  in  the  Gymnasium  group,  and  to  which 
25  to  31  hours  are  devoted  per  week,  are  with  the  exceptions 
and  substitutions  noted  above,  religion,  German,  Latin,  Greek, 
French  or  English,  history,  geography,  mathematics,  natural 
science,  penmanship  and  drawing. 

''The  Ober  Real  Schulen,  in  which  the  ancient  languages  are 
entirely  eliminated,  are  intended  to  prepare  the  student  for  the 
technical  and  commercial  professions. 

"The  greater  number  of  these  schools  are  located  in  the 
Rhineland  province,  the  great  industrial  district. 

"The  Real  Schulen  group  have  a  six  years'  course  only,  but 
the  course  may  be  continued  in  the  Ober  Real  Schulen  by  com- 
pleting the  three  upper  grades  of  the  latter.  The  student  who 
has  completed  a  nine  years'  course  in  any  of  these  schools,  is 
entitled  to  admission  to  the  universities. 

"Much  stress  is  laid  upon  gj'mnastics  throughout  the  entire 
course  in  these  upper  schools.  Two  afternoons  in  the  week, 
not  devoted  to  studies,  are  reserved  for  this  purpose. 

"The  courses  for  the  higher  education  of  German  women 
cover  a  term  of  nine  or  ten  years,  which  compares  with  our  high 
schools  and  colleges  in  purpose,  and  in  the  kind  of  education 
attained  in  them. 

' '  Some  of  the  higher  schools  for  females  are  private  and  others 
are  state  schools,  but  all  are  under  state  supervision.  To  these 
courses  may  be  added,  in  order  to  fit  the  German  women  for 
academical  study,  a  four  years'  course  patterned  or  selected 
from  the  course  of  the  Ober  Real  Schule. 

"The  German  universities,  in  consequence  of  their  historical 
development,  occupy  a  conspicuous  position  among  the  univer- 
sities of  the  world.  This  also  holds  good  for  the  technical  uni- 
versities and  the  other  scientific  institutions  of  Germany.  The 
universities  do  not  merely  serve  for  acquiring  the  highest  edu- 
cation in  scientific  matters,  but  are  at  the  same  time  centers  for 
independent  research;  their  libraries,  laboratories,  collections, 
observatories,  etc.,  are  consequently  fitted  up  not  only  to  meet 
the  requirements  of  students,  but  are  intended  to  give  instruc- 
tors and  young  experimenters  the  means  and  assistance  for  fur- 
thering the  development  of  science  in  all  its  branches. 

"This  sphere  of  university  activity  finds  important  exten- 
sion in  the  work  of  the  academies  and  learned  societies  which 


EDUCATIONAL  SYSTEMS  399 

are  organized  and  supported  by  the  state.  The  state  academies 
are  all  situated  in  university  towns  and  members  thereof  are 
qualified  to  deliver  lectures  in  the  universities. 

"The  immediate  purpose  of  the  universities  is  to  give  instruc- 
tion in  science,  theology,  law,  medicine  and  philosophy.  The 
philosophical  faculty,  which  originally  had  the  task  of  prepar- 
ing students  for  entry  in  the  upper  courses,  now  covers  a  very 
large  field.  Languages,  natural  science,  chemistry,  mathemat- 
ics, pedagogy,  political  economy  are  some  of  the  principal 
branches  taught. 

"The  principal  representative  of  the  university  is  the  rector, 
who  holds  the  office  for  one  year  and  is  elected  by  the  professors 
among  their  number.  The  business  of  the  various  faculties  is 
transacted  by  the  deans  who  are  similarly  elected  by  the  regular 
professors  of  each  faculty.  The  body  of  instructors  for  science 
consists  of  regiilar  professors  and  private  tutors  in  addition  to 
which  are  lecturers  and  assistants.  The  students  matriculate  at 
the  university  and  are  enrolled  in  one  of  the  faculties.  Only 
those  are  fully  qualified  to  matriculate  who  have  the  certificate 
from  one  of  the  nine  years'  course  upper  schools  (Gymnasium, 
Real  Gymnasium,  Ober  Real  Schule).  Foreigners  must  pro- 
duce a  certificate  of  a  corresponding  standard.  Students  may 
also  be  enrolled  in  the  philosophical  faculty  under  less  exact- 
ing conditions.  Besides  this,  certain  branches  admit  Hoerer 
(listeners)  to  the  lectures. 

"That  there  are  a  great  number  of  women  in  Germany  in 
higher  education  is  not  understood  in  this  country,  probably 
for  the  reason  that  the  greater  application  of  the  male  students 
takes  away  attention  from  them.  Women  are  not  satisfied  merely 
to  complete  the  academic  courses,  but  take  the  university  courses 
of  four  years  or  more  leading  to  degrees.  In  the  winter  semes- 
ter of  1911,  the  women  students  were  4.8%  of  the  w^hole  num- 
ber of  matriculated  students,  some  4,532  attending  the  univer- 
sities, of  which  2,795  were  full  fledged  students  and  the  balance 
listeners.  The  former  had  been  through  the  regular  prepara- 
tory courses  required  of  the  male  students  while  the  listeners 
were  subject  to  the  same  requirements  as  the  men  listeners. 

The  subjects  pursued  by  women  students  during  the  semester 
mentioned  above  were  philosophy,  philology,  and  history,  1,563 
students;  mathematics  and  natural  history,  504;  medicine,  582; 
political  economy,  67 ;  law,  39 ;  dentistry,  27 ;  pharmacy,  8 ;  Prot- 
estant theologj',  5. 


400  THE  PRICE  OF  INEFFICIENCY 

"All  faculties  confer  the  degree  of  doctor  and  the  theological 
faculty  also  covers  the  lower  degree  of  licentiate.  The  secur- 
ing of  such  a  title  is  not,  as  a  rule,  the  aim  of  the  students,  as 
alone  it  does  not  qualify  him  for  the  state  service.  Besides  the 
purely  academic  examination  for  the  degree  of  doctor,  state  ex- 
aminations are  held  for  the  principal  professional  callings  and 
ecclesiastical  examinations  for  the  theological.  To  be  admitted 
to  a  theological,  legal  or  higher  grade  of  teachers'  examination, 
it  is  necessary  to  take  a  course  of  study  of  three  years  at  the 
university  as  a  fully  matriculated  student.  For  the  medical 
profession,  the  period  of  study  has  been  lengthened  to  five  years. 

"Following  is  a  list  of  the  German  academies  and  universi- 
ties: 

"Academies: 

"Berlin,  established,  1700;  Goettingen,  1751 ;  Muenchen,  1759; 
and  Leipzig,  1846. 

' '  Universities : 

"Heidelberg,  established  1386;  Leipzig,  1409;  Rostock,  1419; 
Greifwald,  1456;  Freiburg,  1457;  Tuebingen,  1477;  Marburg, 
1527 ;  Koenigsberg,  1544 ;  Jena,  1558 ;  Wuerzburg,  1582 ;  Giesen, 
1607;  Kiel,  1665;  Halle,  1694;  Breslau,  1702;  Goettingen, 
1737;  Erlangen,  1743;  Berlin,  1809;  Muenchen,  1829;  Strass- 
burg,  1872;  Bonn,  1880  and  Muenster,  1902  (founded  as  an 
academy  1771)." 

The  German  educational  system  overlooks  no  department  in 
which  activity  in  later  life  must  be  exercised.  Training  is 
divided  into  three  principal  branches;  industrial,  commercial 
and  technical;  industrial  for  the  worker,  commercial  for  the 
business  man  and  his  assistants,  and  technical,  for  the  engineer- 
ing, chemical  and  similar  branches. 

The  Journal  of  Commere,.  Oct.  25,  1911,  reports  an  address 
by  Herr  Dr.  Knorck,  of  the  Commercial  Schools  of  the  Berlin 
Board  of  Trade,  describing  the  progressive  and  thorough 
methods  of  the  German  Commercial  educational  movement. 

"The  practical  German  teaching  which  has  been  handed  down 
from  the  guilds  and  corporations  of  the  Middle  Ages,  according 
to  which  the  apprentice  came  into  the  closest  social  and  business 
connection  with  his  master  and  teacher,  has  had  a  part  in  its 
modernized  form  in  the  successes  which  the  German  merchant 
has  won  in  the  world's  markets.  His  present  occupation  was 
backed  by  the  thoroughness  of  German  scientific  education, 
which,  since  the  middle  of  the  last  century,  has  clearly  recog- 


EDUCATIONAL  SYSTEMS  401 

nized  the  social  problems  of  to-day,  by  the  establishment  of  com- 
mercial and  economical  schools,  and  has  developed  them  system- 
atically. Professional  education  and  commercial  teaching, 
practice  and  theory  worked  together  in  Germany  to  create  a 
mighty  army  of  clever  mercantile  employees,  and  a  chosen  host 
of  far-seeing  merchant  masters,  who  are  not  afraid  of  the 
greatest  enterprises  in  the  trading  world  at  home  or  abroad. 
The  state  municipalities  and  the  commercial  unions  supported 
this  far-reaching  economical  culture  to  their  utmost  ability. 

"Practical  experience  is  as  always,  regarded  in  Germany, 
as  the  most  important  foundation  of  professional  training. 
After  a  certain  all-around  education  has  been  attained  at  the 
elementary  or  intermediate  school,  the  future  merchant  usually 
begins  the  practical  training  at  once,  which,  in  keeping  with 
ancient  custom,  lasts  three  years.  For  those  who  have  passed 
through  the  intermediate  schools  with  their  six  classes,  who 
have,  that  is,  received  a  certificate  of  one  year  military  service, 
sometimes  two  to  two  and  a  half  years  are  regarded  as  suffi- 
cient; even  those  who  have  the  graduating  certificate  of  the 
higher,  nine-class  school,  and  therefore  have  the  right  to  go  to 
the  university  or  technical  university,  must  submit  to  this  long 
practical  training.  A  long  practical  course  extended  over 
several  years  is  even  required,  quite  apart  from  the  general 
education,  before  one  can  attend  the  German  commercial  col- 
leges. 

"As  to  the  practical  training,  the  German  commercial  code 
imposes  certain  definite  duties  upon  the  employer  in  his  re- 
lation to  the  apprentice.  He  is  obliged  to  see  that  the  appren- 
tice is  (1)  initiated  into  all  the  commercial  business  of  the  firm. 
Hie  is  to  (2)  conduct  the  education  of  the  apprentice,  either  per- 
sonally or  by  means  of  a  capable  representative.  (3)  Thorough- 
ness and  method  should  prevail  throughout  this  training,  which 
ought  not  to  be  encroached  upon  by  services  of  a  secondary  na- 
ture. The  principal  is  expected  to  watch  over  the  moral  con- 
duct of  his  apprentice  and  encourage  him  to  attend  the  con- 
tinuation school.  He  has  likewise  to  look  after  his  physical 
welfare.  Those  who  have  forfeited  the  rights  of  citizenship 
are  not  retained  as  apprentices. 

"No  intelligent  and  successful  merchant  in  any  land  to-day, 
will  be  found  to  deny  for  the  coming  generation  of  merchants, 
the  necessity  of  theoretical  and  scientific  education  along  with 
practical  training.     The  apprentice  ought  thus  to  be  trained 


402  THE  PRICE  OF  INEFFICIENCY 

to  clear  reasoning,  and  the  knowledge  and  skill  gained  by  him 
in  business  will  be  widened,  organized  and  deepened. 

"What  means  are  tried  in  Germany  for  this  purpose  and 
what  are  the  results?  All  masters  are  obliged  to  allow  all  ap- 
prentices sufficient  free  time  to  attend  a  publicly  recognized 
professional  or  continuation  school.  At  the  same  time,  the  in- 
dustrial code  gives  the  town  authorities  the  right  of  compelling 
all  male  and  female  commercial  apprentices  up  to  the  age  of  18 
years  to  attend  school.  These  authorities  are  thus  allowed, 
though  not  compelled,  by  the  imperial  law  to  maintain  compul- 
sory professional  and  continuation  schools. 

"The  courses  in  these  professional  schools,  to  which  those  of 
the  Berlin  Merchants'  Corporation  also  belongs,  corresponds 
generally  to  the  practical  apprenticeship,  namely,  three  years 
with  six  hours  a  week.  Very  few  courses  exceed  this  number 
of  hours,  those  of  the  Berlin  corporation  with  eight  hours  and 
those  in  Saxony  with  twelve  being  exceptions. 

"The  curriculum  contains  the  following  subjects:  Shorthand, 
which  has  been  almost  universally  adopted ;  general  commercial 
instruction  as  the  basis  and  introduction  for  the  entire  sphere 
of  commercial  knowledge,  which  is  contained  in  practically 
every  course;  office  and  correspondent  work  are  usually  con- 
nected with  this;  and  the  all  important  commercial  arithmetic 
is  included  in  each  year's  curriculum.  Commercial  and  eco- 
nomical geography  has  been  almost  everywhere  introduced  as  an 
obligatory  subject,  while  everybody  is  in  agreement  as  to  the 
fundamental  significance  of  bookkeeping  and  civics. 

"The  question  over  which  there  is  most  dispute  is  whether  a 
foreign  language  should  be  introduced  into  the  course.  This 
is  naturally  as  good  as  impossible  in  a  six  hour  course.  In  Ber- 
lin, with  our  eight  hours,  we  have  made  one  foreign  language 
(English  or  French)  compulsory;  three  hours  being  allotted  to 
it." 

The  former  idea  of  Germany  as  a  country  of  soldiers,  black 
forests,  violins,  castles,  professors,  beer  and  dreamers  is  now 
being  sharply  revised.  It  is  seen  that  the  rest  of  the  world 
has  less  to  fear  from  German  military  ambitions  than  from  its 
army  of  scientists,  engineers,  scientifically  trained  directors  of 
industrial  enterprises  and  highly  educated  commercial  agents. 
That  she  possesses  such  an  army  as  the  latter  is  due  to  her  edu- 
cational system,  particularly  the  technical  schools  and  univer- 
sities.    The  great  value  of  these  is  described  by  President  Had- 


EDUCATIONAL  SYSTEMS  403 

ley  of  Yale  University,  who  in  his  address,  "What  the  United 
States  has  to  Learn  from  the  Technical  Training  of  Germany," 
delivered  before  the  Brooklyn  Institute  of  Arts  and  Sciences, 
and  based  on  personal  study  and  observations  while  he  was 
lecturing  before  the  universities  in  Germany,  said: 

"There  are  two  great  points  in  the  German  educational  sys- 
tem which  must  impress  every  one — the  use  of  the  technical 
training  and  that  of  the  military  training  of  the  people.  The 
children  are  forced  to  go  to  the  elementary  schools  for  a  time, 
and  during  that  part  of  their  education,  they  are  kept  out  of  the 
shops  and  factories.  They,  however,  receive  instruction  in  the 
rudiments  of  shop  and  factory  work." 

Dr.  Hadley  laid  particular  stress  upon  the  growth  and  useful- 
ness of  the  technical  schools  in  Germany  during  the  last  half 
century.  Before  the  spread  of  these  schools  in  Gemiany,  he 
said,  the  Germans  were  considered  an  idealistic  and  sentimental 
people. 

"To-day  they  are  intensely  practical,"  he  said.  "They  are, 
indeed,  more  practical  than  the  Americans.  They  have  become 
a  military  race.  Their  ideals  are  technical.  They  value  things 
for  their  value  in  dollars  and  cents  or  for  the  social  position 
w^hich  these  things  give  their  possessors.  The  Kaiser  has  been 
a  ringleader  in  bringing  about  these  changes  in  the  views  of  life 
entertained  by  his  subjects. 

"Our  good  technical  schools  are  rare.  The  graduates  of  our 
technical  schools  get  most  of  their  training  in  the  shop,  on  the 
farm,  or  in  the  mine.  In  Germany,  the  best  part  of  the  stu- 
dent's training  is  received  in  the  schools.  The  objects  of  the 
system  in  the  German  schools  are  two — to  develop  the  individual 
and  advance  the  welfare  of  the  country  by  teaching  the  students 
what  will  best  advance  the  interests  of  the  country. 

"The  attitude  of  public  mind  in  Germany  and  America  to 
the  respective  educational  systems  is  significant.  In  this  coun- 
try it  is  regarded  as  an  accident  if  a  man  who  has  been  taught 
the  theories  of  commercial  life  in  the  schools  succeeds  when  he 
begins  his  active  career.  In  Germany  it  is  considered  an  acci- 
dent, if  success  comes  to  those  men  who  have  not  been  trained 
in  the  schools,  and  an  accident  that  should  not  be  repeated. 

"Is  it  any  wonder  that  England  is  complaining  that  the  Ger- 
man business  men,  who  are  trained  in  the  technical  schools  and 
are  thorough  students  of  the  conditions  they  confront,  are  driv- 
ing  the   English   traders   out   of  the   neutral  ports?     If  such 


404  THE  PRICE  OF  INEFFICIENCY 

methods  succeed  in  commerce  tliey  will  succeed  in  all  things. 
Individual  action  cannot  contend  successfully  with  the  united 
front  of  the  Germans  in  the  long  run.  _  _ 

"I  believe  there  is  developing  in  this  country,  the  spirit  of 
organization.  There  has  been  a  tendency  to  crowd  the  techni- 
cal men  out.  We  are  beginning  to  profit  from  the  lessons  of 
Germany  and  her  education  system,  giving  our  men  good  train- 
ing in  all  lines  adapted  to  practical  life." 

An  account  of  the  technical  educational  system  of  Germany, 
briefly  describing  its  principal  feature  is  as  follows,  taken  from 
the  author's  lecture,  "Engineering  Education  in  Germany,"  as 
given  at  the  eighteenth  annual  meeting  of  the  Society  for  the 
Promotion  of  Engineering  Education,  at  the  University  of  Wis- 
consin, June,  1910: 

"After  the  great  struggle  from  which  the  German  states 
gained  their  independence,  at  the  termination  of  the  Napoleonic 
War  in  1815,  the  economic  conditions  of  Germany  had  reached 
the  lowest  ebb.  At  that  time  the  German  states  had  but  a 
small  population  left,  owing  to  the  undeveloped  state  of  com- 
mercial industries  and  the  devastation  due  to  this  long  struggle. 
In  England,  at  that  time,  the  steam  engine  had  begun  its  tri- 
umphal progress  and  opened  up  the  country's  richness  in  iron 

and  coal. 

"It  was  recognized  in  Germany  that  the  country  could  only 
be  lifted  economically  through  the  expansion  of  industrial  activ- 
ity. Two  ways  led  to  this  end;  the  practical  way,  taken  by 
pioneers  like  Krupp,  Borsig  and  Siemens,  working  quietly  and 
uninterruptedly  to  replace  the  former  state  of  handicraft  by 
organized  industry;  and  the  theoretical  way,  adopted  by  the 
government,  of  placing  industry  on  a  scientific  basis  by  the  es- 
tablishment of  technical  schools.  That  permanent  progress  in 
competition  with  other  countries  could  only  be  built  up  satis- 
factorily on  such  a  foundation  is  proven  by  the  recent  develop- 
ments in  chemistry  and  electricity,  as  well  as  in  heat-engines 
and  in  engineering  in  general. 

"The  beginning  of  the  German  technical  schools  dates  back 
to  the  middle  of  the  nineteenth  century.  Nearly  all  of  the 
technical  colleges  originated,  however,  from  the  so-called  Mittel 
Schulen  (intermediate  schools),  and  only  after  they  had,  by 
continuous  effort,  obtained  a  high  standing,  did  they  obtain 
charters  as  Technische  Hoch  Schulen  (technical  universities). 
As  an  example,  the  Berlin  Technical  University  was  formed 


EDUCATIONAL  SYSTEMS  405 

by  the  union  of  the  Architectural  School  founded  in  1779  and 
the  Commercial  Acadaray  or  Trade  School,  founded  1821. 

"The  aim  of  the  technical  university  is  expressed  in  the  first 
paragraph  of  the  constitution  of  the  Berlin  Technical  Univer- 
sity, which  reads  as  follows :  '  The  aim  of  the  technical  university 
is  to  furnish  a  means  for  higher  education  for  the  technical 
professions,  in  civil  and  industrial  service  and  in  commercial 
undertakings,  as  well  as  to  cultivate  the  arts  and  sciences  so 
far  as  they  come  under  the  head  of  technical  instruction.* 
Every  technical  university  has  departments  for  separate  studies, 
and  in  each  are  divisions  for  architecture,  civil,  mechanical  and 
electrical  engineering,  chemistry,  metallurgy'  and  mining; 
natural  sciences  and  mathematics.  There  are  some  of  these  uni- 
versities which  have  special  departments,  as  electro-chemistry, 
marine  engineering  and  aerial  navigation,  forestry,  agriculture, 
etc. 

"The  great  development  of  technology  made  necessary  the 
opening  of  a  great  number  of  new  courses  in  all  the  technical 
schools.  The  most  recent  new  course  is  that  in  aerial  naviga- 
tion, thus  helping  to  make  a  positive  science  of  this  means  of 
transportation. 

"Germany  at  present  has  eleven  universities,  established  and 
chartered  as  technical  universities  as  given  below: 

"Berlin,  established  1799,  chartered  1799;  Stuttgart,  1829, 
1862;  Dresden,  1828,  1851;  Carlsruhe,  1825,  1865;  Darmstadt, 
1836,  1868 ;  Aix  la  Chapelle,  1870,  1870 ;  Brunswick,  1745,  1877 ; 
Munich,  1827,  1877;  Hanover,  1831,  1879;  Danzig,  1904,  1904; 
and  Breslau,  1905,  1905. 

"A  certain  prescribed  preliminary  education  is  necessary  to 
qualify  the  student  for  admission  to  the  technical  universities. 
There  are  three  classes  of  attendants :  the  regular  student,  the 
so-called  'listener'  and  the  guest.  Those  who  wish  to  enter  as 
regular  students  must  have  had  a  nine-year  course  of  instruc- 
tion at  one  of  the  G^Tunasiums,  Real-Gymnasiums  or  Ober-Real- 
Schulen,  and  must  have  graduated  therefrom  by  taking  the  so- 
called  'Abiturienten'  examination.  This  nine-year  course  can- 
not be  entered  upon  until  after  the  student  has  passed  through 
a  three  or  four  year  course  in  the  lower  schools,  so  that  if  he 
enters  the  latter  at  the  age  of  six,  he  will  be  at  least  nineteen 
years  of  age  before  he  enters  the  technical  college,  since  he  must 
also  put  in  one  year  at  practical  training  in  regular  manufac- 
turing plants. 


406  THE  PRICE  OF  INEFFICIENCY 

"In  the  Ober-Real-Schulen  ancient  languages  have  been  en- 
tirely eliminated  from  the  course  of  study  and  more  time  is 
devoted  to  modern  languages,  natural  sciences  and  mathematics, 
the  whole  course  being  especially  arranged  for  preparing  the 
student  for  the  technical  professions.  The  majority  of  these 
Ober-Real-Schulen  are  found  in  Prussia,  there  being  42  as 
against  69  in  Germany,  and  as  stated,  the  greater  number  of 
these  schools  are  located  in  the  province  of  Rhineland,  the  great 
industrial  district. 

"The  practical  experience  prescribed  for  these  students 
covers  at  least  one  year,  for  mechanical  and  electrical  engineer- 
ing, in  pattern  shops,  foundry  and  machine  shops.  Two  years 
are  frequently  voluntarily  devoted,  part  of  which  is  spent  in 
construction  in  the  field. 

"As  military  service  in  Germany  is  compulsory,  being  gener- 
ally a  two  or  three  year  service,  it  might  be  stated  here  that 
those  who  have  graduated  from  any  of  the  three  schools  refer- 
red to  are  required  to  serve  only  one  year  in  the  army.  Many 
students  first  absolve  this  military  service  before  entering  the 
technical  university.  As  the  regular  course  in  these  univer- 
sities consists  of  eight  semesters  (four  years)  it  will  be  observed 
that  the  graduate  from  the  university  will  have  reached  the 
age  of  at  least  twenty-four  years. 

"Technical  universities  confer  first  the  degree  'Diplom  In- 
genieur'  (always  abbreviated  as  'Dipl.  Ing.').  The  certificate 
of  graduation  always  qualifies  the  graduate  to  enter  upon  a  fur- 
ther examination  for  the  degree  of  'Doctor  Ingenieur'  (abbre- 
viated as  'Dr.  Ing.')-  This  degree  may  also  be  conferred  as  an 
honorary  title  in  recognition  of  work  done  in  a  technical  line. 

"A  graduate  having  the  degree  'Dipl.  Ing.,'  must,  if  he 
desires  to  enter  the  federal  service,  give  notice  thereof  to  the 
state  within  six  months  after  graduation,  and,  if  engaged,  after 
state  examination,  he  is  made  'Regierungs  Baufiihrer.'  After 
being  in  service  for  four  years,  he  may  take  a  promotion  ex- 
amination for  'Regierungs  Baumeister,'  and  eventually  may 
reach  the  top  of  the  service. 

"The  'listener'  can  only  be  qualified  to  enter^  the  German 
Technical  University  after  graduating  from  one  of  the  six-year 
courses  in  the  Pro-Gymnasiums  or  Real-Schulen.  The  distinc- 
tion between  Gymnasium  and  Real-Schule  is  as  follows:  To  the 
former  belong  the  Gymnasium,  with  a  nine-year  course,  and  the 
Pro-Gymnasium  with  a  six-year  course.     To  the  second  class, 


EDUCATIONAL  SYSTEMS  407 

or  Real-Sclmlen,  belong  those  in  which  Latin  is  included,  namely 
the  Real-G\annasium  and  the  Real-Pro-Gyranasium.  The  term 
in  the  former  is  nine  years  and  in  the  latter  six  years.  To  this 
group  belong  also  such  as  include  no  Latin  course,  namely,  the 
above  named  Real-Schule  with  a  nine-year  course,  and  the  Real- 
Sehule  with  a  six-year  course.  The  graduate  from  such  schools 
with  a  six  year  course,  need  also  serve  but  one  year  in  the  army. 
A  preliminary  course  of  from  three  to  four  years  in  the  lower 
school  precedes  the  courses  in  these  six-year  or  upper  schools. 
This  graduate  is  termed  'Einjahriger,'  with  reference  to  the 
military  service,  and  the  graduate  from  the  nine-year  course 
alone  is  referred  to  as  the  ' Abiturient, '  (one  who  has  made  the 
Abiturienten  examinations) . 

"  'Listeners'  may  also  be  those  who  have  graduated  from  a 
Technische  Mittel-Schule  or  College,  such  as  the  Technicum, 
Maschinenbau-Schule,  Baugewerk-Schule,  Kunstgewerbe-Schule, 
etc.  These  listeners  are  usually  men  of  riper  age,  who  have 
already  been  engaged  in  practical  work  and  who  wish  to  acquire 
additional  knowledge  in  their  special  branches  of  work.  They 
therefore  choose  but  certain  lectures,  usually  extending  over 
from  two  to  three  years. 

"  'Guests'  are  those  who  have  had  an  academic  training  or 
such  other  persons  who  would  not  be  regularly  entitled  to  enter 
as  listeners;  they  can  attend  only  a  limited  number  of  lectures. 
"Instruction  in  these  technical  universities  is  in  the  form  of 
lectures,  exercises,  shop  and  laboratory  work  (upon  which  much 
stress  is  laid),  and  visitation  of  manufacturing  plants.  Large 
experimental  shops  and  libraries  serve  as  auxiliaries  for  instruc- 
tion. For  instance,  at  the  Technical  University  at  Darmstadt, 
there  is  a  library  of  800,000  volumes,  while  that  of  the  Berlin 
Library  amounts  to  far  more  than  one  million  volumes. 

"As  is  the  case  in  all  German  Universities,  the  student  may 
attend  the  lectures  to  any  extent  that  he  may  choose,  and  no  roll 
is  called.  It  is  the  intention  to  make  of  the  student  an  inde- 
pendent thinker.  The  attendant  is  supposed  to  have  reached 
the  age  of  responsibility  at  the  time  he  enters  the  university, 
having  passed  through  the  many  grades  of  upper  and  lower 
schools,  and  having  passed  through  the  military  service  and  con- 
formed to  the  strict  regulations  of  the  manufacturing  establish- 
ments. In  all  of  these,  strict  discipline  is  the  watch-word.  The 
student  is  allowed  to  attain  his  scholarships  at  as  many  uni- 
versities as  he  desires,  thus  getting  the  advantage  of  the  dif- 


408  THE  PRICE  OP  INEFFICIENCY 

ferent  methods  of  prominent  professors  in  the  different  subjects, 

''Many  students  do  not  take  the  examination  and  these  re- 
ceive a  certificate  of  attendance  showing  the  semesters  which 
they  attended,  as  do  also  the  listeners  and  guests,  who  are  not 
qualified  to  take  the  examination. 

"In  addition  to  the  technical  universities,  there  are  also  nu- 
merous other  technical  institutes,  such  as  the  Polytechnicum, 
Technicum,  Baugewerk-Schule,  Kunstgewerbe-Schule  and  Mas- 
chinenbau-Schule,  all  of  which  are  classified  as  technical  middle- 
schools  or  colleges.  The  number  of  these  is  far  greater  than 
that  of  the  technical  universities,  and  admission  to  them  is  not 
so  much  restricted.  The  degrees  which  are  obtainable  by  the 
students  of  these  colleges  are  those  of  mechanical  engineer, 
electrical  or  mining  engineer,  etc.,  and  some  of  these  colleges 
confer  the  degree  of  Maschinen-Techniker,  Electro-Techniker, 
etc.  There  are  also  a  number  of  minor  technical  schools,  all 
of  which  are  important  factors  in  making  up  the  present  high 
efficiency  and  high  standard  of  the  industries  of  modern  Ger- 
many. 

"It  should  always  be  considered  the  sacred  duty  of  the  pro- 
moters of  engineering  education  to  instil  in  the  minds  of  stu- 
dents and  to  keep  before  the  engineering  profession  in  general, 
the  fact  that  no  great  headway  can  be  made  as  long  as  the  be- 
lief is  prevalent  that  we  know  it  all  and  cannot  learn  from 
others. 

"Having  discussed  the  system  in  vogue  in  Germany  for  edu- 
cating the  engineer  and  fitting  him  for  his  profession  from  both 
a  theoretical  and  practical  standpoint,  I  will  compare  the  Ger- 
man and  American  engineers  as  to  standing  as  well  as  to  their 
efforts  at  seeking  further  knowledge.  To  expand  his  knowledge, 
the  German  engineer  not  only  serves  in  a  professional  way  with 
engineering  concerns  in  Germany,  but  also  gathers  experience 
by  so  serving  with  such  concerns  in  foreign  countries.  The 
question  of  salary  is,  for  this  reason,  not  considered  by  him  of 
first  importance.  America  is  usually  his  Mecca,  for  he  recog- 
nizes the  fact,  impressed  upon  him  by  German  professors,  that 
much  information  may  be  gathered  there  and  particularly  from 
American  practice.  We  find  this  custom  encouraged  by  the 
government,  as  well  as  by  the  manufacturers  and  technical  so- 
cieties. It  cannot  be  emphasized  too  strongly  that  the  rising 
German  engineer  does  not  refuse  to  believe  that  much  may  be 
acquired  from  the  methods  and  practice  in  foreign  countries. 


EDUCATIONAL  SYSTEMS  409 

"For  this  very  reason  we  find  that  not  only  the  German 
manufacturer,  but  also  the  individual  engineer,  eagerly  sub- 
scribes for  foreign  technical  papers  which  they  thoroughly  study 
and  for  the  study  of  which  they  are  thoroughly  equipped  as  in- 
dicated by  their  educational  training  above  cited.  This  stands 
out  boldly  as  compared  with  the  custom  in  America,  where  the 
engineer  rarely  peruses  a  technical  paper  published  in  a  foreign 
language. 

"While  it  is  believed  here  that  most  literature  of  importance 
is  translated,  it  is,  nevertheless,  a  fact,  that  the  subjects  of 
greatest  importance,  particularly  where  higher  theories  are 
treated,  are  seldom  translated  into  the  English  language.  The 
reason  for  this  is  that  few  American  engineers  who  are  masters 
of  the  foreign  language  care  to  undertake  the  task,  while  foreign 
engineers  do  not  find  it  necessary,  as  they  understand  the  orig- 
inal publication.  It  is  also  true  that  most  translations 
fall  short  in  every  respect  of  being  equal  in  value  to  the  orig- 
inal. 

"During  my  ten  years  of  experience  and  observation  in  this 
country,  I  have  found  that  the  American  engineer  is  too  apt  to 
take  up  the  first  technical  work  at  hand  on  any  special  subject 
and  adopt  for  his  work  or  scheme  the  ideas  or  practice  suggested 
therein.  It  is  sometimes  claimed  that  the  American  engineer 
is  a  thorough  specialist,  but  this  is  not  generally  true,  as  he  is 
apt  to  jump  from  one  line  of  work  to  another  when  there  ap- 
pears to  be  an  inducement  in  the  shape  of  greater  financial 
gain.  In  Germany,  it  is  with  great  difficulty  that  an  engineer 
can  take  up  some  other  line  of  work  because  of  the  customs  pre- 
vailing there  which  must  guide  his  actions.  Such  proceeding 
is  not  looked  upon  favorably,  as  he  would  not  be  considered  as 
having  sufficient  practical  experience  in  the  new  line,  and  if  at- 
tempted it  would  be  at  a  financial  loss  for  a  few  years  at  least. 
A  '  jack-of-all-trades'  is  usually  supposed  to  be  a  master  of  none. 
Bearing  this  fact  in  mind,  it  is  quite  apparent  why  we  have 
in  this  country  so  many  failures  in  connection  with  engineering 
undertakings,  such  as  bridges,  dams,  locomotives,  prime  movers, 
and  entire  industrial  undertakings,  etc.,  as  compared  with  the 
number  and  magnitude  of  such  failures  which  occur  in  Ger- 
many. 

"A  fact  which  is  beginning  to  dawn  upon  us  is  that  we  must 
look  to  Germany  for  originality  and  economies  or  efficiency  in 
engineering  propositions.     In  this  country,  a  proposition  which 


410  THE  PRICE  OF  INEFFICIENCY 

involves  the  expenditure  of  two  million  dollars  for  development 
purposes  would  not  be  looked  upon  favorably.  Such  a  project 
was  the  high  speed  Marienfeld-Zossen  line  equipped  near  Ber- 
lin some  years  ago  to  obtain  a  speed  of  125  miles  an  hour.  Ger- 
man manufacturers  for  their  mutual  interest,  similarly  united  in 
developing  gas  engines  of  large  capacity.  More  recently,  pro- 
moters and  manufacturers,  with  the  assistance  of  the  govern- 
ment, united  to  develop  the  art  of  aerial  navigation.  A  great 
handicap  in  America  is  the  desire  of  manufacturers  and  others 
who  should  foster  engineering  education,  to  standardize  their 
products  for  the  purpose  of  greater  financial  gain.  This  is  un- 
doubtedly a  disadvantage  so  far  as  the  promotion  of  the  engi- 
neering profession  is  concerned. 

"The  standing  of  the  American  engineer  in  his  profession 
and  in  the  community  cannot  be  compared  with  that  of  the 
German  engineer  in  his  country  and  we  need  not  seek  very  far 
for  an  explanation.  All  education  receives  proper  recognition 
in  Germany  and  the  engineer  is  placed  on  a  social  plane  with 
the  doctor,  the  lawyer  and  the  army  officer,  etc.  His  compen- 
sation, as  compared  with  that  of  mere  mechanics,  is  proportion- 
ately higher  than  in  this  country,  so  that  he  is  naturally  able 
to  occupy  a  higher  plane.  The  chiefs  of  departments  as  well 
as  the  consulting  engineers  and  manufacturers,  all  work  in 
harmony  with  the  subordinates  or  assistant  engineers,  design- 
ers, etc.,  and  are  not  loath  to  give  credit  to  whom  credit  is  due 
for  any  new  designs  or  creations. 

"The  engineers  and  assistants  are  all  employed  under  term 
contracts,  and  the  law  prescribes  what  notice  must  at  least  be 
given  to  terminate  the  employment.  This  ranges  from  one  to 
three  months.  It  is  common  practice  to  engage  even  assistant 
engineers  for  terms  varying  from  one  to  five  years,  whereas 
in  America,  the  unjust  practice  prevails  of  laying  off  such  em- 
ployees as  though  they  were  mechanics  or  laborers,  practically 
without  notice,  and  as  soon  as  the  important  engineering  work 
is  completed. 

"One  prominent  concern  is  known  to  have  laid  off  about  one 
hundred  men  on  a  Christmas  Eve  without  giving  any  notice 
whatever.  It  is,  therefore,  not  surprising  that  a  great  many 
well  trained  engineers  drop  their  profession  at  the  age  of  thirty 
years  or  thereabouts  and  enter  upon  vocations  in  which  they 
may  be  assured  of  greater  returns.  This  necessitates  the  em- 
ployment of  new  and  younger  men  when  new  propositions  are 


EDUCATIONAL  SYSTEMS  411 

at  hand,  and  such  men  require  again  to  be  trained  for  their 

duties. 

''This  state  of  affairs  is  directly  chargeable  to  the  engineer- 
ing profession  itself  in  neglecting  to  bring  about  reforms  in 
the  customs  and  remedying  of  such  evils.  In  Germany  the 
conditions  incline  the  engineer  to  stick  to  his  post  through  life 
and  the  engineering  concerns  and  manufacturers  reap  the  ben- 
efit of  his  accumulated  experience  and  knowledge." 

The  system  of  engineering  education  in  Germany  is  such  that 
a  large  number  of  original  researches  and  technical  books  re- 
sult. The  engineer,  to  obtain  the  advanced  titles  of  Doctor  of 
Engineering,  Regierungsbaufiihrer  and  Regierungsbaumeister 
and  other  titles  in  respective  branches  must  do  original  work 
or  prepare  original  theses  on  the  technique  of  his  respective 
branch.  The  papers  are  usually  of  such  high  quality  as  to 
readily  find  publishers  and  thus  a  body  of  original  literature 
on  every  technical  subject  is  built  up,  which  is  of  the  greatest 
value  to  the  industry.  A  large  number  of  technical  books  are 
published  and  the  total  of  these  with  the  theses  of  the  ad- 
vanced engineers  amounted  in  1910  alone  to  10,400  volumes, 
while  the  total  publication  of  all  technical  works  throughout 
the  world,  including  the  foregoing,  amounted  to  only  15,540. 
These  figures  do  not  include  periodicals.  The  technical  works 
of  the  English  speaking  nations  in  that  year  aggregated  but 
2,100  while  the  French  published  2,000. 

It  will  be  seen  that  an  enormous  amount  of  highly  valuable 
scientific  and  technical  material  is  constantly  appearing  in  Ger- 
man which  is  not  available  to  those  who  do  not  understand  the 
German  language. 

As  comparatively  few  native  American  engineers  and  tech- 
nical men  are  acquainted  with  German,  it  wull  be  seen  why  our 
manufacturers  are  lagging  so  far  behind  and  how  costly  ig- 
norance of  the  latest  improvements  is  proving. 

Engineers  not  only  do  not  know  German  but  do  not  know 
the  importance  of  knowing  it.  A  certain  engineer,  even,  in 
addressing  the  American  Institute  of  Electrical  Engineers,  made 
the  astonishing  assertion  that  not  one  graduate  in  10,000  had 
any  real  use  for  German.  At  another  meeting  of  the  society 
a  paper  on  the  subject  of  high  voltage  generators  was  discussed 
and  it  was  wisely  argued  that  generators  of  a  certain  voltage 
were  not  practicable,  although  for  five  years,  just  such  genera- 
tors had  been  in  successful  operation  in  a  number  of  continental 


412  THE  PRICE  OF  INEFFICIENCY 

plants,  and  some  of  much  higher  voltage  had  been  installed. 

An  amusing  sidelight  on  this  exliibition  of  ignorance  and  in- 
competency soon  shone  forth  from  a  London  periodical  which, 
in  equal  innocence  of  German  progress,  announced  that  such 
generators  (those  of  the  lower  voltage)  were  soon  to  be  built 
in  America,  and  that  further  interesting  developments  were  in 
prospect. 

The  three  wise  men  of  Gotham  are  certainly  put  to  the  blush 
by  the  plight  in  which  these  eminent  engineers  find  themselves 
through  their  ignorance  of  the  German  language. 

The  enormous  cost  to  the  public  of  the  ignorance  of  our  en- 
gineers in  regard  to  advanced  German  practice  is  too  frequently 
demonstrated.  The  writer  had  the  good  fortune  to  be  connected 
with  a  prominent  engineering  undertaking  for  the  generation 
of  electric  power,  and  before  the  plant  was  entirely  completed 
had  occasion  to  make  a  report  on  the  efficiency  of  the  plant  which 
showed  that  an  annual  saving  in  operating  expenses  of  $200,- 
000  could  be  made  by  the  adoption  of  German  methods.  When 
such  methods  were  actually  put  in  operation  the  saving  proved 
to  be  even  larger.  A  saving  of  over  $1,000,000  in  the  construc- 
tion cost  of  the  plant  could  have  been  effected  had  the  engi- 
neers in  charge  been  at  the  outset  familiar  with  good  Ger- 
man practice,  which  of  course  is  not  to  be  had  from  books 
alone. 

The  value  of  German  methods  is  better  understood  by  some 
Englishmen  than  by  Americans,  as  the  following,  which  is  a 
quotation  from  a  speech  delivered  in  the  British  Parliament, 
shows : 

"One  of  our  greatest  failures  is  that  less  than  one  per  cent, 
of  our  engineers  and  officers  understand  the  German  language 
so  that  everything  we  wish  to  know  of  German  progress  must 
come  to  us  second-hand  in  insufficient  and  delayed  translation; 
to-day  we  are  at  a  point  where  Germany  is  able  to  build  ten 
ships  against  our  one ;  we  have  to  learn  to  imitate  Germany. ' ' 

Germany  does  not  despise  American  progress  or  seek  to  be- 
little and  obstruct  it,  but  in  fact  is  only  too  anxious  to  take 
advantage  of  all  American  advances.  The  American  Institute 
in  Berlin  exchanges  publications  of  value  with  the  Smithsonian 
Institute  and  promotes  the  translation  of  all  w^orks  likely  to 
be  of  value  to  German  progress. 

One  of  the  results  of  the  German  system  is  seen  in  an  analy- 
sis of  the  awards  of  the  Nobel  prize.    As  is  well  known,  the 


EDUCATIONAL  SYSTEMS  413 

Nobel  foundation  is  based  upon  the  will  of  Dr.  Alfred  Bern- 
hard  Nobel,  the  Swedish  engineer,  chemist  and  inventor  of 
dynamite,  who  died  in  1896,  leaving  an  enormous  fortune. 

Each  of  the  five  annual  Nobel  Prizes  is  worth  $40,000.  They 
are  awarded  for  the  most  important  discoveries  or  improve- 
ments in  (1)  physics,  (2)  chemistry,  (3)  physiology  or  medi- 
cine, (4)  for  the  most  distinguished  work  of  an  idealistic  tend- 
ency in  the  field  of  literature  and  (5)  for  the  best  effort  toward 
the  fraternity  of  nations  and  the  promotion  of  peace. 

In  some  cases  the  prize  is  divided  between  two  competitors. 
The  following  list  summarizes  the  awards  given  up  to  1911, 
The  number  of  recipients  of  prizes  and  half  prizes  is  given 
followed  by  a  figure  in  brackets  showing  the  value  in  full  prizes : 

Germany,  16  (15)  ;  France,  12  (74)  ;  England,  7  (7)  ;  Hol- 
land, 3  (2)  ;  Italy,  4  (2|)  ;  Switzerland,  4  (24)  ;  Sweden,  3 
(24);  Denmark,  2  (H)  ;  Spain,  2  (1);  United  States,  2  (2); 
Austria,  1  (1)  ;  Belgium,  1  (1)  ;  Norw^ay,  1  (1)  j  Russia,  1 
(1),  and  Poland,  1   (1). 

Two  societies  whose  whole  purpose  is  the  promotion  of  peace, 
have  each  received  a  full  prize,  making  a  total  of  fifty  full 
prizes  divided  among  62  competitors. 

The  German  prizes  have  been  as  follows:  Physics,  3  (2^); 
Chemistry,  6  (6);  Medicine,  4  (3^);  and  Literature,  3  (3). 
Thus  Germany  has  received  in  full  prizes  twice  the  aggregate 
of  the  next  competitor,  but  it  has  received  no  prize  for  peace; 
the  prize  records  in  physics,  chemistry  and  medicine  being 
largely  the  result  of  the  splendid  system  of  educational  train- 
ing. The  United  States  has  but  two  prizes,  one  for  physics 
and  one  for  peace.  In  the  last  award,  however,  that  of  1912, 
a  third  prize,  in  medicine,  has  come  to  the  United  States. 

The  German  educational  system  is  constantly  under  scrutiny, 
and  its  creators  adopt  any  improvement  of  value  that  is  evolved. 
A  late  feature  of  importance  is  the  idea  of  exchange  professors, 
which  is  being  carried  out  between  German  and  American  uni- 
versities and  which  is  proving  of  great  value  to  both  countries. 

To  those  who  are  familiar  with  various  educational  systems, 
the  superiority  of  the  German  system  is  obvious.  It  is  being 
adopted  in  whole  or  in  part  by  many  other  countries  and  the 
education  of  the  world  in  the  near  future  is  likely  to  be  largely 
along  the  lines  of  the  German  system. 


CHAPTER  XXVI 
THE  EEMEDIES 

In  considering  the  evils  which  affect  the  United  States,  be- 
ginning with  the  most  obvious,  the  defective  political  system, 
and  continuing  through  the  long  list,  the  one  which  upon  anal- 
ysis appears  to  be  the  basic  factor  in  present  conditions,  is  the 
educational  system.  If  that  be  remedied,  the  remedying  of 
the  others  will  follow  in  time. 

America  is  pausing  now,  like  a  spendthrift  who  by  accident 
first  runs  his  fingers  to  the  bottom  of  a  supposedly  bottomless 
pocket.  The  chilling  idea  that  our  national  resources  are  not 
boundless;  the  realization  that  we  are  getting  down  to  par 
mth  other  nations;  that  our  national  existence  is  open  to  the 
same  dangers  and  threatened  by  the  same  causes  that  give  con- 
cern to  other  nations,  is  upon  us  in  all  its  grim  reality. 

Like  a  youth,  a  few  months  out  of  college,  who  sees  that  the 
world  is  not  his  walnut  after  all,  to  crack  as  he  will,  America  is 
passing  into  a  new  era,  one  of  more  or  less  gravity  and  cer- 
tainly of  less  enthusiasm.  America  is  face  to  face  with  the 
serious  business  of  being  a  sorely  tried  nation  among  sorely 
tried  nations,  with  every  problem  to  meet  and  solve  that  other 
nations  face,  and  no  longer  the  most  favored  of  lands.  While 
its  opportunities  are  still  boundless,  its  duties  are  more  sharply 
defined,  and  the  discipline  of  existence  has  laid  its  hand  on  the 
nation,  as  it  lays  its  hand  on  each  individual  as  he  comes  to 
man's  estate. 

America's  most  pressing  problem  is  education,  for  education 
is  the  fountain  head  of  all  national  progress.  Educational 
standards  must  be  raised,  a  more  efficient  system  of  control 
evolved,  and  moral  training  must  be  included.  The  conscience 
of  the  coming  generations  must  be  developed,  for  conscience  is 
as  capable  of  development  as  any  other  faculty. 

The  principal  office  of  government  is  to  enforce  a  relation  of 
justice  between  those  composing  it  or  under  its  jurisdiction. 
This  is  a  highly  complicated  and  costly  operation  at  present, 
and  is  the  principal  burden  of  civilization. 

414 


THE  REMEDIES  415 

Every  individual  must  work  many  weeks  of  each  year  to 
meet  the  cost  of  enforcing  just  relations  between  his  neighbor 
and  himself,  a  toil  which  savages  escape  by  being  ready  to  risk 
their  lives  in  defending  themselves  from  injustice. 

Proper  moral  training  cannot  fail  to  greatly  reduce  the  total 
of  unjust,  careless  and  neglectful  acts ;  the  prevention  and  pun- 
ishment of  which  make  government  so  costlj^  Conscience  is 
thus  the  greatest  of  all  economic  and  social  factors,  the  great- 
est single  item  in  the  composition  of  civilization. 

Next  in  importance  in  educational  reforms,  must  be  the  con- 
tinuation of  education  until  the  individual  has  a  means  of 
earning  a  livelihood  at  his  command,  not  the  discarding  of 
studies  at  an  early  age,  and  an  aimless  drifting  around  into 
some  unsuitable  occupation.  The  state  owes  itself  the  duty  of 
seeing  that  its  coming  citizens  are  put  on  the  right  road. 
Training  must  be  compulsory  up  to  the  age  of  18,  and  the 
learning  of  some  trade  or  profession  obligatory. 

A  system  must  be  devised,  also,  for  securing  for  each  occu- 
pation a  ratio  of  apprentices  proportionate  to  its  demands,  and 
a  method  for  discouraging  the  influx  into  the  professions  of 
those  whose  abilities  are  better  suited  for  the  trades.  America 
is  crowded  with  incompetent  lawyers,  bad  doctors,  poor  teach- 
ers and  underpaid  clerical  people,  who  might  have  much  more 
profitably  been  good  mechanics  and  famous  carpenters. 

The  whole  development  of  the  nation,  now  becoming  more 
and  more  a  manufacturing  country,  will  depend  upon  the  es- 
tablishment of  better  relations  between  business  men  among 
themselves,  and  between  them  and  their  employees.  The  cap- 
italist must  realize  that  the  welfare  of  the  business  man  is  of 
the  highest  importance,  that  the  prosperity  of  a  country  is 
largely  determined  by  the  body  of  business  men  it  contains,  a 
country  having  a  large  proportion  of  active,  bright,  aggressive 
and  ambitious  business  men,  all  striving  for  new  results  and 
perfections  of  every  kind,  will  outstrip  a  country  in  which  love 
of  ease  and  lack  of  progress  characterize  its  business  men;  in 
which  factories  are  allowed  to  run  themselves,  customers  con- 
sidered a  necessarj?^  evil  and  the  best  hours  spent  in  the  refine- 
ments of  pleasure. 

In  massing  itself  in  large  trusts,  capital  exterminates  the 
business  men  of  the  country.  It  reduces  them  to  the  level  of 
employees  and  dries  up  the  springs  of  initiative,  and  capital  in 
consequence,  reaps  a  low  rate  of  interest,  whereas  distributed 


416  THE  PRICE  OF  INEFFICIENCY 

in  the  hands  of  a  numerous  body  of  business  men,  it  would  be 
put  to  much  more  effective  uses. 

The  small  business  men  who  fall  victims  to  the  trusts  disperse 
in  three  directions.  Some  still  unwilling  to  give  up  their  inde- 
pendence, struggle  along  in  other  lines  by  hook  or  crook,  too 
often  by  crook;  others  become  employees  of  the  trusts  and  the 
third  class  become  commercial  derelicts,  picking  up  whatever 
living  they  can  or  becoming  minor  wage  earners  in  some  clerical 
capacity. 

Thus  one  of  America's  greatest  assets  must  be  better  eon- 
served,  her  business  men,  for  they  are  cleverer  than  the  wage 
earners  and  are  keen,  driving  forces  of  progress,  not  merely 
the  cogs  in  the  wheels.  They  employ  the  bulk  of  the  labor  and 
being  closer  to  labor  are  less  oppressive  as  employers,  besides 
furnishing,  by  not  being  at  too  great  an  interval  away  from 
labor,  an  incentive  for  the  ambitious  wage  earner  to  look  for- 
ward to  the  time  when  he  will  be  able  to  join  their  class. 

The  relations  of  employers  and  employees  must  undergo  a 
radical  change  of  tone.  Means  must  be  found  of  identifying 
their  interest  more  obviously.  If  either  the  employers  or  the 
employees  stop  to  consider  the  matter,  it  will  readily  be  seen 
that  their  interests  are  identical,  though  this  is  a  point  of  view 
not  usually  taken.  Neither  can  exist  without  the  other  and  the 
respective  positions  they  hold  are  determined  by  a  multiplicity 
of  factors  which  are  largely  controlled  by  natural  laws.  The 
employer  who  gets  the  most  out  of  his  men  will  succeed  best  in 
the  end,  but  the  most  cannot  be  gotten  out  by  driving,  and  the 
employee  who  gets  the  most  out  of  his  employer  will  succeed 
best,  but  getting  the  most  out  of  the  employer  is  not  accom- 
plished by  grudging  work  and  dynamite  domination. 

Labor  troubles  frighten  capital  away  and  the  wage  earner 
must  force  out  of  that  left,  a  wage  which  he  might  readily  ex- 
ceed if  his  conduct  encouraged  new  employers  to  come  in  com- 
petition for  his  labor. 

Although  invention,  by  giving  capital  control  of  the  "imple- 
ments of  production,"  the  favorite  phrase  of  the  socialist, 
has  greatly  altered  the  conditions  under  which  labor  is  per- 
formed, this  altered  condition  is  not  permanent.  In  the  last 
century,  owing  to  the  triumphs  of  invention,  vast  savings  have 
been  effected,  and  the  world  is  much  wealthier  than  in  previous 
generations.  This  great  increment  of  wealth  has  been  accumu- 
lated by  the  trusts,  but  measures  will  be  taken  to  prevent  its 


THE  REMEDIES  417 

further  accumulation  in  their  hands,  so  that  a  better  diffusion  of 
wealth  will  take  place,  particularly  as  the  new  wealth  which  will 
be  increased  by  future  inventions  will  come  into  competition  with 
existing  wealth,  to  the  benefit  of  the  wage  earner.  Natural  laws 
which  govern  the  proportionment  of  profits  between  capital  and 
labor  in  accordance  with  their  respective  supply  cannot  be  per- 
manently overcome.  With  capital  plentiful,  the  banks  full  of 
money  and  laborers  scarce,  the  laborer  will  receive  a  larger 
wage,  but  with  capital  scarce,  and  banks  having  little  on  hand 
to  lend,  with  laborers  very  numerous,  the  wage  of  the  laborer 
will  be  smaller. 

Under  modern  conditions,  the  wage  earner  enjoys  a  vast 
propaganda  as  to  his  rights  and  privileges.  A  constant  and 
proper  effort  for  the  betterment  of  his  condition  is  being  made 
by  politicians  seeking  his  vote,  by  societies  of  various  sorts,  by 
his  own  unions  and  by  the  more  progressive  employers.  With 
all  these  agencies  working  for  him,  it  is  reasonably  certain  that 
the  workingman  will  receive  his  just  proportion  of  profits. 
Yet  beyond  the  gains  that  are  fought  for  and  won  for  him,  he 
should  receive  an  additional  liberality,  simply  because  it  will 
pay.  The  prosperity  of  all  depends  on  the  prosperity  of  the 
worker,  and  in  contributing  to  his  welfare,  the  welfare  of  all  is 
advanced. 

In  the  immediate  future,  the  most  feasible  scheme  of  better- 
ment is  in  continuation  education,  and  in  the  three  forms  of 
social  insurance,  accident,  sickness  and  old  age.  To  relieve  the 
worker  of  hardship  and  anxiety  is  to  enable  him  to  devote  him- 
self with  greater  effect  to  his  daily  task. 

A  thoroughly  organized  effort  should  also  be  made  to  establish 
a  system  of  distribution  of  labor,  so  that  the  idle  workers  in  one 
part  of  the  country  may  be  transferred  to  the  places  where  em- 
ployment is  to  be  had.  At  the  same  time,  immigration  should 
be  scattered  properly,  both  for  the  benefit  of  the  immigrants 
and  the  country.  These  are  duties  which  the  government  owes 
to  its  citizens. 

Vitally  necessary  is  a  better  understanding  between  employ- 
ers and  employees,  and  the  capitalist,  as  indicated,  must  take  a 
more  progressive  and  wholesome  attitude  towards  the  employees 
of  capital,  those  who  work  in  capital's  interest,  the  business 
men.  The  destructive  system  of  American  banking  must  be 
fundamentally  reorganized. 

Capital  which  is  managed  with  liberality  and  foresight  ac- 


418  THE  PRICE  OF  INEFFICIENCY 

complishes  vastly  more  for  itself  and  for  the  welfare  of  the 
country  than  capital  directed  iu  the  usual  hardshell  "show-me" 
spirit  which  dominates  at  present. 

Inventors  must  be  given  a  square  deal,  business  must  get  a 
fair  opportunity,  and  the  spirit  of  initiative  and  encouragement 
must  pervade  capital  as  well  as  all  branches  of  commerce  to 
accomplish  the  results  that  should  be  accomplished. 

A  better  understanding  must  be  brought  about  between  capi- 
tal and  government,  for  under  present  conditions,  the  same 
distrust  and  animosity  and  antagonism  which  characterize  the 
relations  of  labor  and  capital,  extend  to  capital  and  the  govern- 
ment. The  employer  is  a  step  above  the  wage  earner,  the 
capitalist  a  step  above  the  employer,  and  the  government  a  step 
above  the  capitalist,  but  here  the  vicious  circle  begins  again, 
because  the  government  is  the  wage  earner  en  masse;  very  im- 
perfectly expressed  but  nevertheless  the  voice  of  the  people  and 
the  voice  of  God. 

The  government  as  it  now  exists  not  only  is  an  imperfect  ex- 
pression of  the  will  of  the  people,  but  in  many  respects  is  an 
actual  distortion,  for  capitalism,  in  a  spirit  of  insubordination, 
has  sought  to  control  the  force  by  which  it  must  in  the  natural 
order  of  events  inevitably  be  controlled,  the  will  of  the  people, 
for  the  will  of  the  people  is  all  powerful  and  the  only  power, 
and  if  its  admonitions  are  deliberately  and  contumaciously  re- 
jected, it  may  turn  and  with  a  single  act  of  confiscation  level 
on  a  fatal  day  the  exploitation  of  generations  and  of  centuries. 

The  government  as  it  is  now  constituted  is  a  house  divided 
against  itself.  The  law  makers  and  those  who  execute  the  law 
are  some  serving  the  public  and  some  capital,  and  the  govern- 
ment thus  commands  no  respect  and  accomplishes  nothing.  In 
desperation  it  tears  at  the  structure  of  business  and  creates  dis- 
trust and  alarm,  but  at  the  same  time  its  efforts  are  not  regarded 
as  being  made  in  good  faith,  and  are  seen  to  affect  no  good  re- 
sult. 

Trusts  are  neither  broken  up  nor  allowed  to  Avork  the  bene- 
fits of  which  they  are  capable.  In  order  to  handle  the  great 
business  undertakings  which  modern  conditions  demand,  great 
corporations  are  necessary.  They  are  economically  good  and 
produce  results  in  efficiency  which  the  small  organization  can- 
not rival  and  the  trust  can  serve  the  public  better  than  the 
smaller  dealer.  The  true  interest  of  the  public  is  in  drawing 
the  monopolistic  fangs  of  the  trust,  but  at  the  same  time  pre- 


THE  REMEDIES  419 

serving  its  useful  features,  and  if  our  sj'stem  of  government 
were  a  good  one,  this  result  could  be  accomplished.  But  the 
lack  of  competent  and  faithful  officials,  the  presence  of  un- 
trained politicians  and  official  favorites,  and  the  lack  of  single- 
ness of  purpose  in  the  government  undermines  its  efforts  and  a 
chaotic  condition  exists,  which  must  soon  be  remedied  if  we  are 
not  to  encounter  far  more  serious  conditions  than  any  we  have 
thus  far  had  to  contend  with. 

At  the  root  of  the  matter  is  the  canker  of  inefficiency.  Every- 
where, in  every  department  of  public  life,  with  only  sporadic 
exceptions,  the  wrong  thing  is  done  and  inexperience  and  in- 
competency flourish  in  the  graveyard  of  prosperity.  There  is 
not  an  industry,  not  a  factory,  store  or  shop,  that  does  not  halt 
at  the  prospect  of  uncertainty  and  agitation.  The  nation  is 
cursed  by  politics  and  burdened  by  the  great  twin  evils  of  busi- 
ness in  polities  and  politics  in  business.  The  will  of  the  peo- 
ple is  strangled  by  an  antiquated  system,  by  incompetency,  bad 
faith  and  the  disgraceful  struggle  for  personal  advantage  in- 
dulged in  by  office  holders.  Instead  of  officials  who  when  as- 
sailed in  office,  tender  their  resignation  and  thus  throw  into 
confusion  their  detractors  when  their  motives  are  questioned, 
we  have  a  stripe  of  office  holders  who  cling  to  office  to  the  last 
extremity  and  destroy  respect  for  themselves  and  for  the  office 
they  hold. 

Above  all  is  the  pernicious  and  outrageous  sacrifice  of  the 
interests  and  welfare  of  the  people  for  the  sake  of  partisan 
politics.  Nero  is  said  to  have  played  the  fiddle  while  Rome 
burned,  but  he  certainly  could  not  have  played  it  more  industri- 
ously than  our  office  holders  play  politics  while  prosperity  is 
vanishing  in  smoke. 

At  this  time,  when  the  most  vital  of  business  questions  is  be- 
fore the  public,  the  determination  of  the  fate  of  the  great  cor- 
porations, there  is  absolutely  no  hope  of  an  immediate  solution. 
The  whole  fabric  of  business  is  shaken;  doubt,  uncertainty  and 
stagnation  prevail  and  no  solution  of  any  kind  is  in  sight.  All 
must  wait  while  ruin  overtakes,  that  the  interminable  processes 
of  our  political  system  may  spin  themselves  out  in  their  accus- 
tomed way;  still  further  delayed  by  the  unconscionable 
struggle  for  political  advantage  among  groups  of  office  holders 
who  style  themselves  political  parties. 

At  times  we  have  a  president  of  one  political  complection, 
and  with  remarkable  fortune,  a  congress  of  another.     It  w^ould 


420  THE  PRICE  OF  INEFFICIENCY 

be  an  unthinkable  thing  under  such  circumstances  for  them 
to  consult  the  welfare  of  the  country  first  and  act  in  con- 
cert in  the  emergency,  and  divide  the  credit  afterwards.  In- 
stead, however  admirable  the  legislation  which  Congress  may 
enact,  however  patriotic  and  charged  with  public  welfare  it 
may  be,  no  president  of  another  group  of  office  holders  could 
dream  of  lending  his  approval  to  it;  and  knowing  this,  the  pa- 
triots of  congress  can  fairly  revel  in  admirable  legislation,  which 
they  would  not  dare  to  pass  if  they  thought  it  would  be  ap- 
proved. Thus  is  politics  played  and  the  president  "put  in  a 
hole."  And  as  for  the  president,  who  imparts  in  his  messages 
information  to  congress  as  to  the  condition  of  the  country,  which 
they  know  more  about  than  he  does,  we  may  be  sure  that  how- 
ever wise  and  beneficent  may  be  his  admonitions,  a  congress 
composed  of  a  rival  group  of  office  holders  will  never  lend  an 
ear  to  it. 

Each  side  will,  however,  endeavor  to  extract  as  much  political 
credit  from  the  situation  as  possible  and  seek  to  cover  their 
opponents  with  the  greatest  possible  discredit;  but  of  honest 
effort  for  the  welfare  of  those  on  whose  earnings  they  fatten, 
there  will  be  little  or  none. 

Why  should  not  remedial  legislation  be  made  possible  in  an 
expeditious  manner?  Why  should  there  be  such  interminable 
delays?     Who  benefits  by  it?     Not  the  public,  certainly? 

The  directors  of  the  great  oil  trust  meet  daily.  No  question 
in  its  policy  or  business  can  arise  in  any  part  of  the  world  which 
cannot  be  settled  in  twenty-four  hours  by  the  highest  authority. 
Yet  in  our  government,  the  trust  question  has  not  been  settled 
in  twenty  years,  and  there  is  absolutely  no  legal  question  of 
vital  importance  that  can  be  settled  by  the  government  in  less 
than  three  or  four  years.  Why  should  a  corporation  have  a 
better  system  than  the  government?  Why  should  it  be  efficient 
and  the  government  inefficient? 

The  question  always  comes  back  to  the  nature  of  our  political 
system.  We  live  under  a  constitution  which  is  ineffective  and 
antiquated,  which  was  formulated  by  men  of  wealth  in  the  in- 
terests of  what  is  now  known  as  "interests"  and  not  as  was  so 
speciously  promised,  in  the  interests  of  the  people. 

It  is  a  constitution  which  proclaims  the  right  of  life,  liberty 
and  the  pursuit  of  happiness,  but  which  makes  living  so  costly 
that  one  man  in  twelve  is  buried  in  the  potter's  field;  it  pro- 
vides that  no  cruel  or  unusual  punishment  shall  be  inflicted, 


TH"E  REMEDIES  421 

yet  daily  men  are  being  made  eunuchs  in  state  prisons,  a  bar- 
berous  custom  tolerated  in  no  other  civilized  nation  under  the 
heavens  and  a  reproach  to  humanity;  it  is  a  constitution  which 
guarantees  liberty,  but  under  which  there  is  less  liberty  than 
possessed  by  the  subject  of  any  constitutional  monarch  of 
Europe.  It  is  a  constitution  which  divides  with  scrupulous 
care  the  departments  of  the  law's  making,  the  law's  execution 
and  the  law's  interpretation,  but  under  which  the  president  has 
powers  greater  and  more  autocratic  than  any  king  in  Europe, 
and  in  which  the  judiciary  has  greater  power  than  is  to  be  found 
in  any  similar  body,  yet  in  which  the  laws  delays  are  a  denial 
of  justice  nowhere  else  exhibited.  It  is  a  constitution  which 
provides  a  government  of  laws,  but  under  which  lawlessness  is 
widespread  and  rampant,  and  it  assumes  to  be  a  system  of  no  tax- 
ation without  representation ;  yet  it  creates  a  class  of  representa- 
tives who  instead  of  attending  to  the  people's  business,  are  chiefly 
concerned  in  exploiting  their  constituency,  in  continuing  them- 
selves in  office  and  in  utilizing  public  distress  for  political  ad- 
vantage. The  constitution  subverts  the  will  of  the  people,  and 
it  is  an  antiquated  and  imperfect  system.  It  should  be  reor- 
ganized and  made  an  instrument  of  progress,  of  liberty  and  of 
equality.  This  is  the  duty  that  the  public  owes  itself,  a  duty 
which  should  not  be  performed  piecemeal,  but  thoroughly  and 
forthwith. 

Under  the  present  system,  inefficiency  costs  at  the  lowest  esti- 
mate, over  a  hundred  and  ten  dollars  a  year  for  each  person 
and  for  the  33,000,000  Avage  earners,  not  less  than  $5.75  per 
week  per  wage  earner.  These  are  conditions,  not  theories! 
"Whose  hand  is  in  the  public's  pocket  to  this  depth,  and  why  do 
we  allow  the  disgrace  and  robbery  to  continue? 

******** 

The  first  whine  that  incompetency  has  to  make  for  itself,  when 
brought  face  to  face  with  foreign  improvements,  is  that  the  im- 
provements are  not  applicable  to  local  conditions. 

This  is  a  foul  excuse,  the  product  of  jealousy;  it  is  the  first 
and  readiest  excuse  of  those  who  are  lacking  in  energy  and 
initiative  and  who  prefer  sloth  and  ignorance  to  progress  and 
public  welfare. 

It  is  typical  of  the  official  and  the  hog-mannered  business  man 
whose  only  idea  of  progress  is  to  fatten  but  who  must  be  forced 
aside  if  any  real  progress  is  to  be  made. 

Although  it  is  humiliating  to  the  jingoism  of  those  who  are 


422  THE  PEICE  OF  INEFFICIENCY 

convinced  that  every  improvement  of  any  consequence  if  it  does 
not  originate  in  their  own  sphere  must  be  deprecated  and  de- 
clared an  absurdity  and  fought  at  every  point ;  it  is  nevertheless 
true  that  the  nations  and  individuals  who  make  the  greatest 
progress  are  those  who  adopt  improvements  whenever  they  are 
to  be  found  and  who  from  such  points  of  vantage,  move  on  to 
new  improvements  of  their  own,  and  this  is  true  not  only  of 
nations  and  individuals,  but  also  of  municipalities,  trade  organi- 
zations and  corporations. 

In  all  departments  of  life,  too,  those  who  thus  fight  against  im- 
provements are  those  also  who  show  the  greatest  of  contradictions 
in  their  positions. 

For  example,  government  ownership  of  telegraph  and  cables 
is  opposed,  yet  the  government  conducts  the  post  office,  and  the 
proposition  to  turn  it  over  to  private  capital  is  never  advanced ; 
municipal  traction  and  electric  lighting  systems  are  violently 
opposed,  yet  the  water  supply  systems  of  cities  are  in  almost  all 
instances  controlled,  owned  and  operated  by  the  municipalities 
themselves ;  violent  opposition  is  shown  to  fixing  maximum  prices 
of  trust  products  and  prevention  of  the  monopolization  of  nat- 
ural resources,  yet  the  Interstate  Commerce  Commission  by  fix- 
ing rates  stands  between  the  public  and  railroad  extortion  and 
prevents  monopolies  of  transportation,  and  while  activities  of 
the  Government  in  the  fostering  of  foreign  trade  are  criticised, 
yet  the  most  paternalistic  of  devices,  the  tariff,  protects  favored 
manufacturers. 

These  are  but  a  few  examples  of  the  contradictions  so  apparent 
in  American  institutions  and  numberless  others  could  readily 
be  cited  in  every  phase  of  public  and  private  enterprise,  and  fur- 
ther not  only  not  satisfied  with  refusing  to  look  around  and  see 
what  improvements  are  to  be  had,  self-sufficient  officials,  when 
finally  aroused,  are  too  often  to  be  seen  going  through  with 
lengthy  and  expensive  experiments  with  much  loss  of  time  and 
waste  of  money  to  ascertain  facts  which  have  already  long  been 
known  to  those  who  are  familiar  with  conditions.  This  is  a  mole- 
like attitude  which  would  be  amusing  were  it  not  so  tedious  and 
criminally  expensive. 

And  too  often  when  improvements  are  adopted  it  is  long  after 
their  foreign  usefulness  has  been  exhausted,  still  later  improve- 
ments having  taken  their  place  abroad.  This  is  a  kind  of  second 
hand  progress  Avhich  is  not  much  better  tlian  the  original  old 
fogyism. 


THE  REMEDIES 


423 


It  wiU  be  self  evident  that  many  of  the  improvements  which 
have  been  outlined  in  this  volume  will  ultimately  be  adopted,  but 
only  as  has  been  the  case  with  numerous  improvements  in  the 
past,  after  interminable  delays  and  the  squanderings  of  great 
sums  of  money. 

It  should  accordingly  appeal  to  the  public  reason,  that  un- 
necessary delay  and  self  interested  opposition  to  proven  advan- 
tage so  obviously  within  reach,  are  nothing  less  than  crimes 
against  progress  and  the  welfare  of  humanity. 

Why  then  it  may  be  asked  are  such  crimes  tolerated? 

And  who  is  responsible? 


\ 


\\ 


\ 


INDEX 


INDEX 


Abuses,  in  congress,  159. 
Academies,  German,  400. 
Accidents,  45. 

compensation,  328. 

insurance,  316,  322. 

in  mines,   46. 

in  transportation,  xviii. 
Account,   carrying  the,   232. 
Adler,  Dr.  Felix,  307. 
Administration,   131. 

waste,  xviii,  22. 
Administrative   inefficiency,   33. 

graft,  xiv. 

personal,   5. 
Administrators,   expert  advisers   to, 

107. 
Advertisements,    ultimate    cost    of, 

360. 
Aeroplanes,  172. 

Advisers,  experienced  technical,  107. 
Aviation  deaths,  332. 
Agriculture  Department,  33. 

horses,  64. 

neglect  of,  xiv. 
Air  nitrate,  258. 
Alarms,  fire,  58. 
Albert,  Talbot  J.,   111. 
Alcohol   consumption,   240. 
Aldermen,  board  of,  145. 
Aldrich,  Senator,  23'. 
American   architecture,   121. 

aviation,   179. 

business  men,  215. 

civilization,   346. 
Americans,  duty  of,  to  America,  6. 
American,    Education,    393. 

engineers,    161. 

vs.  Germany,  xxi. 

vs.  German  mechanics,  329. 

government,   166. 

institution,  422. 

inventors,   167. 

iron  industry,  264. 

laws,   216. 

liberty  being  destroyed,  10. 

magazine,  the,  308. 

427 


American       Medical        Association, 
Journal   of,   341. 

patent  system,   167. 

pausing,   414. 

pioneer  inventions,   160. 

pluck,  xii. 

Prison  Association,  342. 

politics,  grade  of  men,   158. 

problem,   116. 

public,    346. 

sentiment,  332. 

voice   of,   162. 

methods  of  education,  391. 

wealth,   78. 
Ambassadors,   technical  advisers  to, 

30. 
Americanized   immigrants,   370. 
Americanizing  a  play,  67. 
Anglo-Saxon   strains,   114. 
Animals,  waste  of,  xviii. 
Annual   fire   loss,   55. 
Annoyances,  359,  374. 
Appellate  Courts,  20. 
Application  for  position  of  Mayor, 

106. 
Architecture,  American,  121. 
Armament,  cost  of,   31. 
Army,  shame  of  our,  301. 

deserters,  302. 
Art  of  cooking,  366. 
Arrests,    spectacular.    236,    237. 
Atlantic  Monthly,  The,  98,  163,  195, 

320,  391. 
Auctioneers,  227. 

Aliens,  money  contribution  of,  288. 
Austin  dam,  262. 
Authority,  respect  for,  105. 
Autocracy,    144. 
Automobiles,   361. 

manufacture,  communal,  209. 

racing,    331. 
Aviation,  father  of,   178. 
Ax  grinding,  250. 


B 


Baensch,   106. 
Baker,  E.  W.,  175. 


428 

Bakeries,   365. 
Ballin,  Albert,  108. 
Ballot,  primary,  13. 
Baltimore  Sun,  300. 
Banks,  organization  of,  232. 
central  co-operative,  99. 
profits  of,  232. 
in  U.  S.,  221. 
Bankers  and  brokers,  233. 
Banking  facilities,  245. 
Barbarism,  345. 
Basle's  death,  S'32. 
Baseball  craze,  339. 

fan,    338. 
Becker,  Lieutenant,  373. 
Beer    consumption,    240. 
Belgium  relief  societies,  299. 
Benedict,  Justice,  382. 
Berlin,  City  of,  267. 

Merchants'    Corporation,    402. 
BernstorflF,   Count  von,    126. 
Bethlehem   Steel   Co.,   308. 
Betrayers  of  young  girls,  308. 
Birds,  damage  by,  41. 
Birkeland,   Prof.,   259. 
Bismark,   4,   7,    100. 
doctrine,  293. 
remark,   151. 
remedy,   4. 
policy,  97. 
Blackmailing,  216. 
fine  art  of,  233. 
Black,  Senator  L.  M.,  20. 
Blatchfort,  Robert,  91,  92. 
Board  of  Aldermen,  145. 
Bosses,   the,   12. 
Boxing,  336. 
Bread,  balanced,  243. 
British  don'ts,  255. 
dreams,  255. 
government,  253. 
iron   industry,  264. 
nation,  255. 
press,   252. 
student,   264. 
stupidity,    254. 
trade  unions,  299. 
Bread,  hot,  243,  365. 
Books,  technical,  411. 
Brown,  Thomas,  25. 
Brokers,   224. 

Brutality  in  business,  221. 
Buerger,  Schule,  395,   396. 
Bull-fighting,  335. 
Burgherr,  German,  126. 
Bureaucrats  of  Germany,  11. 
Building  laws,   246. 


INDEX 


Buildings,  grouped,   134. 

of  road,  54. 

for  working  men,  244. 
Business,   brutality   in,  221. 

is  business,  215. 

of  German  government,  101. 

man  in  the  U.  S.,  107. 

man's  loans,  229. 

men  snuffed  out,  224. 

men  of  to-day,  273. 

men's  failure,  221. 
By-products,   39. 

0 

Callaway,  Representative,   25. 
Calver,  Richard,  110. 
Canal,   electric  haulage,  271. 

systems,  266. 
Candidates  for  oflJces,   12. 

for   presidency,    156. 
Canker  of  inefficiency,  419. 

destroys  liberty,  10. 
Capita,  loss  per,  xxi. 
Capital,  concentrated,  74. 

and  labor,  79,   182. 
Capitalistic  employers,  183. 
Capitalists,  central  groups,  76. 
Care  of  working  people,  317. 
Carnegie,  309. 
Carnegie  Restitution,  311. 
Caro,  Nikodemus,  259. 
Cartels,  German  trust.  111. 
Catholic  Religion,  389. 
Cattle,  366. 
Cavendish,  259. 
Central  co-operative  bank,  99. 
Changing  names,   291. 
Chanute,  Octave,  177. 
Chemicals,  367. 
Chemistry,  38. 

modern,  257. 
Child  labor,  193,  307. 
Chili   saltpeter,   258. 
Chinese  badge  of  honor,  250. 
Christiania,  259. 
Christian  religion,  3'90,  393. 
Cicero,  91. 

Citizens,  future,  381. 
City  Beautiful,  134. 

building  in  Germany,  124. 

factor  in  life,  115. 

government,    16,   247. 

growth,    116,    138. 

individuality,  119. 

planning,  137. 

planning,  principle  of,  140. 


INDEX 


429 


City  water  supply,  56. 

water,  waste  of,  xviii. 
Civilisation,  American,  346. 

future,   124. 

Romans,   139. 

work  of,  xxiii. 
Civil  war,  cost  of,  26. 
Class  distinction,  82. 
Coal   by-products,  38. 

mining,  accident,  46. 

production,  37. 

waste,   xvii,  xix. 
Colbert,  8. 
Columbus,    394. 
Comenius,  394. 
Cornerstone  of  progress,  104. 
Commerce,  stimulating,  248. 
Commercial  Academy,  405. 

code,   401. 

functions  of  a  state,  86. 

training,  401. 

Schools,  400. 
Commission  government,  142. 

government  in  Japan,   144. 
Commissioners,  governmental,  select- 
ing, 146. 

of  labor,  326. 

of  patents,  169. 
Common  law,  97. 

people  bearing  the  losses,  222. 

school    in    Germany,    303. 

sense  practice,   xvii,  xix,  321. 
Communal    advertising,    209. 

industry,  203. 
Complaints    against    patent    office, 

170. 
Competition  in  Germany,  217. 

with  trusts,  210. 

restoring,  72. 
Complaint  books,  375. 
Compulsory  education,  393'. 

insurance,  325. 
Concerts,  sacred,  118. 
Concentrated  capital,  74. 
Councils,  town,  126. 
Contradictions,  Edison's,  239. 
Confidence,   destruction   of,  xiv. 
Congress,    158,   420. 

abuses  in,  159. 
Congressmen,  17,  157. 
Conservation  committee,  36. 

of  human  life,  44. 

what  it  is,  32. 
Constitutional    monarchy,    153. 
Constitution,  defective,  159. 

of  U.  S.,  150,  152,  343. 

failure  to  modernize,  xiv. 


Consumers'   Clubs,  355. 

union,  346. 
Continuation  schools,  392. 
Contradiction  in  American,  383. 
Control  of  children,  380. 

of  industry,   74. 

of  legislatures,  15. 
Conventions,   14. 

systems  of,  13. 
Convicts,  342. 
Cooking,  349. 

art  of,  366. 

by  electricity,  287. 
Copernicus,  394. 
Copper,  production,  37. 
Copyright  system,   176. 
Cosmopolitan    Magazine,    243,    252, 

301. 
Cost  of  Fire  Insurance,  58. 

of  Civil  War,  26. 

of  ignorance,  412. 

of  living,   190,  359. 

of  school  maintenance,  395. 

of  sickness,  49. 
Courts,  Appellate,  20. 

of  Commerce,  263. 

power  of,   155. 
Country   of   contradiction,   383. 

of  soldiers,  402. 
Crimes,  344. 

of  the  Pork  Barrel,  268. 
Criminals,  372. 
Crisis  in  America,  xiv. 
Crops,  waste  of,  xviii. 
Crowe,  Col.,  334. 
Crown   Prince,   German,   21. 
Currency,  230. 

Cutting  out  the  middleman,  346. 
Cyanamid,  260. 


D 


Daily   expenses,    S'47. 
Daniel  in  the  lion's  den,  118. 
Dare  devil  drivers,  3S1. 
Dead  mass  of  currency,  234. 
Death  rate  among  wage  earners,  49. 

aviation,   332. 
Declaration  of  Independence,  305. 
Defects  of  Constitution,  153. 
Dehmel,   Richard,   239. 
Delays,  legal,  21. 
Democracy,  144. 
Dentistry,'  366. 
Depredations,  381. 
Depravity,  344. 
Derelictions,  387. 


430 


INDEX 


Deserters  from  the  Army,  302. 
Des  Moines  plan,  143. 
Destruction  of  confidence,  xiv. 
Destructive  patent  system,  xiv. 
Deutschland  als  Weltmacht,  322. 
Development  of  educational  system, 
405. 

water-power,   42. 
Dictator  of  Finance,  82. 
Diesel  engines,  162. 
Diplomacy,  German,  248. 
Diplom  Ingenieur,  406. 
Discharge  of   engineers,   410. 
Discipline,  388. 

of    children,    380. 
Diseases,  377. 

industrial,    xiv. 

preventative  measures,  53'. 

workmen,  51. 
Dishonesty,  official,  10. 
Disrespect  for  law,  343. 
Distress  work,  297. 
Distribution  of  wealth,  256. 
Distrust  in  business,  219. 
Divorce,    18,    379. 
Doctor  Engineer,  411. 
Domestic  constraints,  321. 
Domestic   relations,   379. 
Dooley,  W.  H.,  163,  195,  198,  391. 
Dortmund-Ems  canal,  267. 
Dreadnoughts,   English,  386. 
Dreams,  British,  255. 
Dreher,  William  C,  98,  320. 
Drift  towards  socialism,  98. 
Drinking,  242. 
Drugs,  368. 
Duma,  Russian,  158. 
Dunn,  A.  W.,  23. 
Duty  of  the  state,  304. 

of  Americans  to  America,  6. 
Dutch  windmill,  275. 
Dwellings,   127. 


E 


Earnings  of  wage  earners,  193. 
Eastern  trade,  249. 
Economy,  22. 

of  fuel,  39. 

lesson  in,  184. 
Edison,  Thomas  A.,  235,  238. 
Edison's  contradictions,  2S'9. 

tradition,  174. 
Education,  383. 

campaign,  386. 

engineering,    162,   295. 
Educational  reform,  414. 


Educational  system,  xiv,  385. 

methods,    390. 
Effects    of    commission   government, 
147,  156. 
of  law,  20. 
Efficiency  movement,   199. 

of  workingmen,  329. 
Eggs,  waste  of,  xix,  65. 
Elbe,  the,  267. 
Electrical  engineering,  174. 
Electric  railway,  410. 

canal  haulage,  271. 

farming,  175,  271. 

lamps,  174. 

plowing,  278. 

Review,  272. 

World,  166,  174,  184. 
Elective  offices  in  Grermany,  107. 
Elevated  roads,  130. 
Eliot,  Dr.  Charles  W.,  305. 
Emperor  Wilhelm,  243. 
Employees,  414. 
Employers,  416. 
Employer   and  employee,   182. 
Employment  insurance,  300. 

of  women,  326. 
Emerson,  Harrington,  69. 
Engineers,  American,  161. 
Engineer  and  farmer,  272. 

doctor  of,  411. 

licensed,  185. 
Engineering  education,    162. 

education  in  Germany,  404. 

failures,  262. 

Magazine,    6,    69,    78,     199,    260, 
388. 

modern,  257. 

News,  160. 

undertakings,  123. 
Engines,  Diesel,  162. 
England's    complaints   of    Germany, 
403. 

statesmen  of,  250. 

waking  up,  xiv. 

bugaboo,  251, 

colonies,  249. 

educational  campaigns,  386. 

dreadnoughts,  386. 

illiterates,   386. 

newspapers,  252. 

speaking  nations,  411. 

trade,  403. 
Englishmen's  naturalization,  284. 
Enterprises,    communal,    212. 
Equitable  fire,  59. 
Europe,  effete  nations  of,  161. 
European  practice,  261. 


INDEX 


431 


European   public,   346. 

Europe,  United  States  of,  17. 

Evans,  Powell,  56. 

Evil  efifects,  414. 

Evils  of  business,  419. 

Exchange  of  Professors,  413. 

Exhibition  flights,  333. 

Expert  advisers  to  Administration, 
107. 

Experienced  technical  advisories  to 
government  and  municipal  poli- 
tics, 107. 

Extras,  newspapers,  361. 

Extravagance,    governmental,    22. 
due  to  advertising,  360. 

Eyde,  S.,  259. 

F 

Factory  sanitation,  50. 
Failures  of   business   men,  221. 
Fairchild,  Henry  P.,  284. 
False  representation,  218. 
Family,   the,   380. 
Fan,  baseball,  338. 
Farm  by-products,  278. 
electric  operated,  271. 
losses  to,  products,  41. 
products,  279. 
yield  of,  40. 
Farmers  and  banks,  222. 
European,  246. 
and  engineers,  272. 
benefit,  273. 
cold  storage,  277. 
wages,  40. 
ignorant,   64. 
Farming,  electric,  175. 
Fathers,  378. 

Federal  administration,  xvi. 
commission  government,   159. 
council,  323. 
and  state  law,  19. 
Feudalism,  345. 
Fertilizer,  257. 
Fighting  forest  fires,  35. 
Financiers,  Wall  Street,  75. 
Fitch,  John  H.,  309. 
Fire  alarms,  58. 
Firearms,  343. 
Fire  chief's  boast,  62. 
Fire,  Equitable,  59. 
forest,  33,  34. 
insurance  costs,  58. 
losses,  xviii. 
Fire  senses,  372. 
Flagg,  Ernest,  121. 


Flag,  the  German,  249. 
Fletcher,  Dr.  Robert,  162. 
Floods,  waste  due,  xvii. 
Food,  injurious,  365. 
Football  games,  333. 
Foreign  language,  409. 

trade,  422. 
Forests,  33. 

Forest    fires,    xvii,    34. 
public  ownership  of,  36. 
taxes   on,   34. 

Fortbildungs  Schule,   392. 

Fourth   of  July,   305,   340. 

Framers  of  Constitution,  153. 

Frank,  Adolph,  259. 

Frankenstein,  228. 

Frauds,   pension,   25. 

Frederick  the  Great,  7. 

Frederick  Wilhelm  I,  394. 

Freedom    from    political     influence, 
105. 

Friendship  in  politics,  13. 

Frisbie,  J.  J.,  332. 

Froebel,  Frederick,  395. 

Fruits,  injury  to,  63. 

Fuller,  Hubert  Bruce,  266,  268. 

Function  of  nation,  85. 

Funeral  standard,  184. 

Future,  civilization  of,  124. 


G 


Gaffney,  T.  St.  John,  292. 
Galileo,    394. 
Galveston  flood,  143. 
Gambling,   227. 
Games,  333. 
Garbage,  363'. 

destructors,  364. 
Garfield,  270. 
Gas  supply,  37. 

waste   of,  xvii. 
German  administrators,  251. 

aesthetic  lobe,  238. 

army  conditions,  303. 

banking,  235. 

Burgherr,  126. 

brain,   23S. 

canal  systems,  266. 

characteristics,    124. 

chemists,  259. 

cities,   124. 

colonies   in  England,   251. 

conditions,   xxi. 

courts  regarding  trust,  110. 

drift  towards  socialism,  98. 

domestic  costumes,  321. 


432 


INDEX 


German  education,   295,   385,   387. 

Emperor,  294. 

Empire,  162,  395. 

farmers,  276. 

flag,  249. 

government,  373. 

government  business,  101. 

government  owned  properties,  103. 

immigration,  294. 

immigrants,  114. 

insurance  systems,  S'15. 

invasion,  251. 

iron  and  steel  industry,  264. 

mayor,  106. 

navy,  254. 

news,  253. 

people,  267. 

police,  373. 

professors,  408. 

progress,  294,  412. 

population,  xii. 

railways,  100. 

street  lighting,  176. 

success,  391. 

syndicates,   112. 

trusts,  108. 

universities,  164. 

voters,   114. 

wealth,  78. 
Germanizing  the  World,  243,  252. 
Germany  vs.  America,  xxi. 

elective  offices  in,  107. 

schools,  303. 

statesmen  of,  250. 

supporting  65  million  people,  6. 
General  Electric  Co.,  170. 
Gewerbe    Gerichte,    197. 
Girls,  downfall  of  young,  308. 
Goods,  pushing,  248. 
Gordon,  Cliff,  158. 
Governmental  inefficiency,  9,  420. 

ownership,  88,  422. 

participation,  314. 

properties,  103. 

regulation,  84. 

socialism,  83,  88. 

socialism   in   Germany,  96. 

support,    180. 

tax  on  money,  231. 

advisers,  107. 

attitude,  262. 

city,  16. 

commission,  142. 

extravagance,  22. 

insurance,  325. 

losses,  234. 
money,   233. 


Governmental    office,    414. 

organization,  17. 

is  responsible,  xiv. 

support,  392. 
Graft,  9. 

in   administration,   xiv. 
Graduates,  390. 
Great  Britain  exception,  266. 
Great  lessons  to  be  learned,  xxiii. 
Grinding  an  ax,  250. 
Growth  of  cities,    116,   138. 
Guests,  at  colleges,  407. 
Guttenberg,  393. 
Gymnasium,  German,  395,  397. 


Handicaps,  industrial,  160. 

Hamburg  American  Line,  108. 

Hadley,  President,  403. 

Hard  times,  225. 

Haussmann,  Baron,  134,  139. 

Hebrew  Religion,  389. 

Herbergen,  297. 

Herggelet,  Mariano,  254. 

Herrick,  Governor,  xvi. 

Herring,  W.  G.,  177. 

Hittites,  ball  games,  336. 

Hogarth,  Prof.,  336. 

Holland,  267. 

Hollweg,  Dr.  von  Behrmann,  21. 

Home  rule,  117. 

Homicide,  342. 

Horses  and  mules  on  the  farm,  272. 

Horse  power,  water,  261. 

Horwill,  Rev.  Herbert  W.,  5. 

Hotchkiss,    William   H.,    xvi. 

Hours  of  work,  S08,  309. 

Household  servants,  321. 

furniture,  360. 
Houses,  overheated,  371. 
Howe,   Frederick  C,   124,  295,  298, 

317,  321. 
Howard,  Justice,  20. 
Human  development,  xii. 

life,  342. 

life,  conservation  of,  44. 
Hunters,  Pension,  26. 
Husband,  European,  374. 
Hydroelectric  developments,  41. 

plants,  260. 


Ice  Cream,  365,  368. 
Ignorance,  cost  of,  412. 

of  farmers,  64. 
Illiterates,  386. 


INDEX 


433 


Imitative  spirit,  173. 
Immigration,  283. 
in  1910,  287. 
policy,   xir, 
total  of,  114. 
value  of,  289, 
to  U.  S.,  114. 
Immigrants,    Americanized,    370, 
disappointed,  291, 
of  various  Nations,  114, 
Implements  of  production,  416. 
Important  inventions,  161. 
Incivilities,  387, 
Incompetency,  administration,  xiv, 

the  whine  of,  421, 
Independence  day,   341. 
Individuality  in  cities,  119. 
Individual  action,  404. 
Industrial  accidents,  48. 
battle,  203. 
diseases,  xiv,  xviii. 
depression,  297. 

developments,  the  reasons  for,  164. 
enterprise,  160. 
handicaps,   160,   182. 
insurance,  xiv. 

originality,   160.  ^ 

regulations,  197. 
research  offices,  165. 
restriction,   xiv, 
supremacy,    182. 
unrest,  xiv. 
Industry,  control  of,  74, 
modern,  202, 
small,  202, 

the  State  in  private,  8, 
IneflBcience,  administration,  xiv,  33, 
canker  of,  419, 
governmental,  9,  420. 
Inquisition  into  private  affairs,  151. 
Instructions,  hours  of,  392. 
Instructions,  methods  of,  392, 
Insurance      department,      Germany, 
296, 
efficiency  of  workingmen,  329. 
social,   314. 
system,  315,  320,  323. 
International  intercourse,  xii. 
Interstate     Commerce     Commission, 

87,  149, 
Invalidity    and    old    age    insurance, 

316,  324, 
Invention,  416. 
origin,   xii, 
European,  167. 
progress  due  to,  83, 
Inventors,  American,  167. 


Ironmaster,  311. 

Iron  and   steel  manufacturers,   164. 

industry,  264. 

ore,  production,  37. 
Irrigation   by   electricity,  277. 
Isolation,  political,  5. 
Italian  endowed  societies,  299. 


Jack-of-all-trades,  409. 
Japan,  commission  form  of  govern- 
ment, 144. 
progress,  xiv. 
Johnson,  Tom,  117. 
Jones,  John  Paul,  301. 
Jones,  Sam  L.,  117. 
Journal  of  Commerce,  400. 
Judges  of  United  States,  18. 
Junge,  Dr.  Franz  Erich  Hermsdorff, 
6,  76. 


Kaiser,  the,  108. 
Kepler,  394. 
Kindergarten,  395. 
King  Edward,  251. 

of  finance,  82, 

George  III,  305. 

the  money,  82, 
Kitty  Hawk,  178, 
Knarck,   Dr,,    400, 
Koester,  Frank,   174,  260,  272,  274, 

301,  393,  404. 
Kratz,   Obergrat,   322, 
Krueger,  pardon  of  Oscar,  237. 


Labaratory,  technical,  166. 
Laborer,  wages  and  hours,  308. 

and  capital,  79,  182. 

registrations,  295. 

troubles,  416, 

unions,  189. 

U,  S,  Commissioner,  314. 

women,  51. 
Lackeys  of  Wall  Street,  228. 
Landrecht,  7. 
Lawless  country,  151. 
Lawlessness,  236. 
Laws,  defective,  216. 

in  Germany,  217. 

inadequacy  of,  xiv. 

passed  in    1910,  xvi. 

respect  for,  21. 

of  the  U.  S,,  20. 

passed  by  Tyros,  11. 


434 


INDEX 


Lawyers  gains,  317. 
Leading  men,   154. 
Lead  poisoning,  48. 
Lebensweisheit,  239. 
Legal  delays,  21. 

pest.  National,  21. 
Legislation,  420. 
Legislators,  incompetent,  11. 

salaries  of,  10. 

control  of,  15. 
Legitimate    transactions,    228. 
L'Enfant,  139. 
Length  of  life,  50. 
Leonard,  H.   Ward,  166,  170. 
Lentze,  Dr.,  106. 
Liberty,  canker  destroys,  10. 
Licensed  engineers,  185. 
Life,  length  of,  50. 

loss  of,  xviii. 

loss  of,  due  to  fire,  56. 

sacrifice  of,  xvii,  xiv. 

position,  104. 

value  of,  50. 
Lilienthal,  Otto,  178,  333. 
Listeners    at    University    Lectures. 

406. 
Livelihood,  learning  of,  xiv. 
Loan  brokers,  234. 
Log  rolling,  158. 
Lougheed,   178. 
Loss  to  agriculture,  64. 

per  capita,  xxi. 

to  farm  products,  41. 

of  life  by  fire,  56. 
Law's  delays,  21. 
Lynching,  344. 


M 


Made  in  Germany,  250. 
Magdeburg,   106. 
Magee,  Louis  J.,  388. 
Manchu  ordinance,  250, 
Mania  for  standardization,  185. 
Manufacturers,  communal  groups  of. 
209.  ^       ' 

favored,  422. 

of  Germany,  235. 

syndicates,' 99. 
Marienfeld-Zossen,  410. 
Marriage,  380. 

Maternity  insurance,  316,  327. 
Maxwell,  Supt.  of  schools,  370. 
Mayor,  position  of,  106. 
Mazda  lamps,  174. 
McClellan,  Mayor,  4,  73,  76,  80. 
McNamara,  199. 


Measures  for  prevention  of  disease, 

53. 
Mecca-America,  408. 
Members  of  consumers  unions,  353. 
Men  of  science,  164. 
Merchant   marine,    xiv. 
Merrie  England,  91. 
Middlemen,  233. 
Miller,  Frank  H.,  332. 
Military  service,  406. 
Mineral  production,  37. 
Mining  accidents,  47. 
Mismanagement  of  railroads,  xv. 

of  post  office,  30. 
Mississippi,    water   ways,   263,   267, 

269. 
Missouri,  I  am  from,  219. 
Mittel  Schule,  396. 
Modern  cities,  117. 

chemistry  and  engineering,  257. 

conditions,  417. 

industry,  202. 
Moltke,  General,  239. 
Monarchy,  constitutional,  153. 
Monarchical  socialism,  101. 
Money   brought   in   by   immigrants, 
288. 

King,  82. 

taken   out  by  immigrants,  288. 
Monopoly,  private,  8,  71. 

and  progress,  6. 
Monopolistic  fangs,   418. 
Monopolies,    failure    to    cope    with, 

xiv. 
Moody,  John,  73. 
Moody  and  Turner,  80. 
Moral  courage,  376. 
Moral  training,  414. 
More,  Sir  Thomas,  91. 
Morgan  &  Co.,  J.  Pierpont,  88. 
Morgan  group,  73. 
Murderers,  342. 
Municipal  labor  registries,  295. 

savings  bank,  100. 

socialism,   115. 

technical  advisers,  107. 

thrift,  130. 
Mutilation,  345. 


N 


Names,  changing,  291. 
Napoleon  of  Finance,  82. 
Napoleon  III,  134. 
National    Commission    government, 
159. 
conservation  committee,  36.^ 


INDEX 


435 


National    gas,    waste    of,    xvii. 

legal  pest,  21. 

pride,  160. 

resources,  xiii. 

traits  of  Germany,  388. 

wealth,  75. 
Naturalized  citizens,  votes  of,  114. 
Naturalization   of  Englishmen,   284. 
Nation's  function,  85. 
Nation,  sorely  tried,  414. 
Naval  demonstration,  251. 

guns,  254. 
Navy,  German,  254. 
Near  East  peril,  387. 
Negroes,  lynching,  344. 

problem,  292. 
Nervous  crystallization,  358. 
Newton,  394. 
Newsboys,  361. 
Newspaper  telegrams,  253. 

time  of  editions  of,  362. 
New  York  American,  372. 

Evening  Journal,  339. 

Evening  Sun,  342. 

Globe,  67,  239,  334. 

Sun,  340. 

Times,  235,  241,  243,  291,  312. 

World,   128,  238. 
Niagara  Falls,  260. 
Nobel  prizes,  412,  413. 
Noises,  360. 

North  American  Review,  48. 
North  Sea,  267. 
Notarbeit,  298. 


Offenders  against  laws,  20. 

Offices,  candidates  for,  12. 

Office  holders,  158. 

Official  dishonesty,  10. 

Official's  foul  excuse,  421. 

Oil  trust,  420. 

Oldfield,  Barney,  332. 

Old    Fogyism,   422. 

Operating  expenses,  savings  in,  201. 

Organized   social   activities,   98. 

efforts.  417. 
Organization  of  banks,  232. 

governmental,  17. 

political,  13. 
Orphan's  insurance,  316,  324. 
Outlook,    The,   295,    321,    331. 
Output,    restricted,    191. 
Overeating,   241. 
Overdressed    women,    308. 
Ownership,  private,   119. 


Panics,  226. 

Pardon  of   Oscar   Kruegei,  237. 

Parliament,  266. 

Patents,  bottled  up,  173. 

complaints,  170. 

congress,  160. 

examiners,  170. 

lawyers,   171. 

office,  169. 

office  profits,  172. 

system,  167. 

system,  destructive,  xiv. 
Patriotic  fervor,   185. 
Patriots,  338. 
Patriotism,  25. 

superfluous,  340. 
Police  system,  372. 
Peat,  40. 

fuel,  waste  of,  XVII. 
Pension    frauds,    XIV,   25. 

hunters,  26. 

system,  waste,  XVIII. 
People,   persistent,   245. 

supporting  65  million  (Germany), 
6. 
People's  will,  373. 
Pepper,  Mr.,  25. 
Peril,  Near  East,  387. 

venereal,  377. 

yellow,  387. 
Perkins,  Greorge  W.,  88. 
Personnel  of  the  administration,  5. 
Pestalozzi,  395. 
Petroleum  production,  37. 
Philanthropy,  311. 
Pinffree.   Hazen   S.,    118. 
Pierce,  B.  F.,  175. 
Pierce,  Paul  P.,  48. 
Players,  professional,  338. 
Pleasure,  refinements  of,  415. 
Plowing,  electric,   278. 
Pockets,  bottomless,  414. 
Poisoning,  lead,  48. 
Policemen,   131. 
Politics,  419. 

in  business,  215, 

in  post  office,  29. 

grade  of  men,  158. 

influence,  freedom  from,   105. 

isolation,  5. 

organization,  13. 

party,  new,  155. 

system,  9. 
Poor  families,  363. 
Poorly  paid  public  servants,  10. 


436 


INDEX 


Poor's  and  Moody's  Manuals,  73,  76. 
Popular  government,  142. 
Population  of  U.  S.,  114. 

per  square  mile,  286. 
Pork  barrel,  16,   157,  268. 
Post  office  department,  xiv,  27,  375. 

waste,   xviii. 
Position,  life,  104. 
Potatoes,  280. 
Potash,  controversy,  79. 
mines,  113. 
syndicate,   112. 
Potato,  waste  of,  xix. 
Potter's  field,  380. 
Poverty  in  Germany,  322. 
Power  of  American  president,  108. 
cost  of,  42. 
of  courts,  155. 
waste,  38. 
Practical  experience,  401. 

politics,  419. 
Presidency,  candidates  for,   156. 
Presidential  board,  159. 
President,  21,  420. 
Presidents  as  lackeys  of  Wall  Street, 

228. 
President,  power  of,  108. 
President  Taft,  172,  237. 
type  of,  154. 
of  U.  S.,  12. 
Prevention  of  forest  fires,  35. 
Price  regulation,  85. 
Primary  ballot,  13. 
Principles    of    commission    system, 

146. 
Pritchett,  Henry  S.,  184. 
Private  capital,  422. 
monopoly,  8,  71. 
ownership,  119. 
properties,  120. 
teachers,  382. 
Problem,    greatest,    258. 
Production  of  mineral,  37. 
Professional  education,  401. 

players,  338. 
Professors,    exchange   of,    413. 

German,  408. 
Profits  of  banks,  232. 

of  governmental  properties,  103. 
Progress,  cornerstone  of,  104. 
due  to  inventions,  83. 
in  engineering,  261. 
stimulating,  248. 
Pro-gymnasium,  406. 
Promotors  in  America,  236. 
Promotion  of  engineering  education, 
404. 


Properties,  governmental,  103. 

profits  of  governmental  properties, 
103. 

private,  120. 

checked,  xv. 

ruining  of,  xvi. 
Protestant  Religion,  389. 
Prussian  common  law,  97. 

revenue,  102. 

schools,  394. 
Public  failure,  378. 

and  inventors,  168. 

opinion,  249. 

reason,  423. 

the  servant  of  the,  3. 

the  servants  of  the,  9. 

servants  of,  xv. 

Service  Commission,  89. 

service,  175. 

utilities,  119. 

welfare,  358,  420. 
Purchasers,  352. 
Purchasing  agents,  354. 

Q 

Quebec  bridge,  262. 

R 

Racing  automobiles,  331. 
Railroads,  69. 

accidents,  46. 

German,  100. 

stations,  133. 

waste,  xviii. 
Ratke,  394. 

Real  Gymnasium,  395. 
Real    Pro-gymnasium,   407. 
Real  Schule,  406. 
Rebate,  consumers  unions,  351. 
Recruits,  300. 
Rectifiers,  367. 
Reducing  selling  cost,  213. 
Refuse,  utilization  of,  130. 
Regierungs  Baufiihrer,  411. 
Regierungs  Baumeister,  406. 
Regulation  of  prices,  85. 

governmental,   84. 
Reichsbank,  99. 
Reichstag,  107. 
Relations,  domestic,  379. 
Relief  societies,  299. 
Religion,  Christian,  389,  390. 
Remedy,   Bismark's,  4. 
Remedies,  the,  414. 
Rensselaer      Polytechnic      Institute, 
162. 


INDEX 


437 


Representation,  congressional,  155. 

false,  218. 
Resources  undeveloped,  257. 
Research  work,  411. 
Respect  for  authority,  105. 

for  law,  21. 

for  woman,  378. 

of  the  public,   xv. 
Restoring  competition,  72. 
Restriction  of  industry,  xiv. 
Restitution,   Carnegie,   311. 
Return  of  immigrants,  290. 
Revenue,  Prussia,  102. 
Review  of  Reviews,   164,  266. 
Rhine,  263,  267. 
Rhineland,  406. 
Ridder,  Herman,  xiii. 
Right  to  work,  xiv,  293. 
River  traffic,  263. 
Roberts,  Elmer,  101. 
Rockefeller,  John  D.,  311. 
Rockefeller,  Jr.,  John  D.,  27. 
Roman  civilization,  139. 
Roman  Catholic  Church,  311. 
Roosevelt,  Col.,  273. 
Rose,  Jack,  372. 
Rosenthal,  Herman,  373. 
Rowdies,  381. 
Rowe,  Prof.  L.  S.,  86. 
Raw  material,  purchase  of,  206. 
Ruining  of  prosperity,  xiv. 
Rural  industry,  276. 

waste,  64. 
Russell,  Charles  Edward,  243,  248, 

252. 
Russian  congress,  158. 

illiterates  of,  387. 


S 


Sacred  concerts,  118. 
Salaries  of  legislators,   10. 
Saloons,  367. 
Saltpeter,  257. 
Salvation  Army,  301. 
Sanitation,   363. 

of  factories,  60. 
Savings  bank  depositors,  256. 

bank,  municipal,  100. 
Second-hand  progress,  422. 
Schools  of  Town  Planning,  135. 

trade,   188. 
Schemes,  fake,  218. 
Schmidt,  Hans,  332. 
Schwarz,  Dr.  Paul,  80. 
Scientific  American,  177. 


Scientific  currency,  231. 

management,  189. 

men,  164. 
Scientifically  trained  directors,  163, 
Scribner's  Magazine,  101. 
Scully,  Thomas,  312. 
Securities,  77. 

Self-satisfied  Americans,  xiii. 
Senses,  five,  372. 
Sense  of  taste,  364. 
Sense  of  smell,  362. 
Servants,  household,  321. 

of  the   public,  xv,  3,  9. 
Shank,  Mayor  Samuel,  359. 
Shame  of  our  Army,  301. 
Sherman   law,  xvii,   113. 
Sherwin,  Louis,  67. 
Show-me  spirit,  179,  418. 
Shoemaker,  Joel,  221. 
Sickness,  cost  of,  49. 
Sickness    insurance,    316,    318,    323, 

325. 
Sidewalks,  375. 
Skinner,  Robert  P.,  108. 
Skyscrapers,  120. 
Small   industries,   xv,   202. 
Small  manufacturer,  restoration  of, 

214. 
Smell,  sense  of,  364. 
Smith,  Adams,  8. 
Smithsonian  Institute,  412. 
Social  improvements,  385. 

insurance,   314. 

laws,  132. 
Socialism,  320. 

governmental,  83. 

Monarchical,    101. 

municipal,  115. 

State,  7. 

what  it  is,  91. 
Socialists,  297. 
Societies    for    various    preventions, 

237. 
Soldiers,  country  of,  402. 
Soldiers,  diseases,  377. 

forest  fires,  34. 

of  the  U.  S.,  300. 
Soil  and  climate,  366. 
Soil  erosion,  xviii,  41. 

fertilization,  258. 
South  America,  249. 
Speculation,  77. 
Speculators,  224. 
Spectacular  arrests,  237. 
Sport,  330. 
Staatsnotrecht,  98. 


438 


INDEX 


Standardization,  183,  186. 

effect  of,  186. 
Standard  Oil  Co.,  80. 

in  Germany,  80. 

group,   73. 
Standing  of  engineer,  410. 
State  board  of  five  governors,  150. 
State's  duty,  415. 
State  and  federal  law,  19. 
Statesmanship,    American,   xiii. 
Statesmen  of  England,  250. 

of  Germany,  250. 
State  socialism,  7. 

the,  in  private  industry,  8. 
Steam  engines,  185. 
Steamship  lines,  249. 
Stefan,  George,  239. 
Stein-Hardenberg,  293. 
Stein-Hardenburg    legislation,    97. 
Sterilization,  345. 
Stillwell,  L.  B.,  162. 
Stimulating  progress,  248. 
St.  Louis,  263. 

exposition,  xxiii. 
Stock   Exchange,   223,   226. 
Stomach,   disorder   of,   365. 
Stores  of  consumers'  unions,  350. 
Street   appearance,   128. 

cars,  362,  371. 

lighting,  175. 

railways,  45,  360. 

waste,  130. 
Student,  British,  264. 

German,  408. 
Stupidity,  British,  245. 
Styles,  183. 

Success  of  Germany,  105,  391. 
Supervision  of  business,  88. 
Survey,  56. 
Swamp  land,  40. 
Swindlers,  368. 
Swindling,  227. 
Systematic  training,  195. 
System  of  education,  385. 

political,  9. 
Syracuse,  automobile  racing  at,  331. 
Syndicates,  111. 

of  manufacturers,   99. 


Taft,  William  Howard,  76. 
Taste,  sense  of,  364. 
Technical  advisers  to  Ambassadors, 
30. 

books  published,  411. 

laboratory,  166. 


Technical   schools,    404. 
Terrible  Germans,  the,  251. 
Testing  plant,  xiv,   165. 
Thackara,  A.  W.,  217. 
Theatrical  inefficiency,  65. 

trust,  66. 
Timber,  waste  of,  34,  36. 
Tom,  Dick  and  Harry,  330. 
Torney,  Surgeon-general,  377. 
TowTi  councils,   126. 

planning,  method  of,  128. 

planning,  schools  of,  135. 
Trade,  English,  403. 

school,  188. 
Traffic,  river,  263. 
Transportation  losses,  44. 

on  water,  263. 
Treasury  department  of  U.  S.,  233. 
Trespassing  on  railroads,  46. 
Thrift,  municipal,  130. 
Trusts,  416. 

competition  with,  210. 

German,  108. 

organizers  of,  223. 

supplanting  the,  202. 

theatrical,  66. 
Trusted  policemen,  131. 
Tungsten  lamp,  174,  275. 
Turmoil   in   America,  xiv. 
Turner,    George    Kilbe,    and    John 

Moody,  80. 
Tyros,  laws  passed  by,  11. 


U 


Uncle  Sam's  soldiers,  300. 
Uncle  Tom's  Cabin,  360. 
Undertakings,    increase   of   German, 

105. 
Undeveloped  resources,  257. 
Unemployment  insurance,  316. 
Universities,  394. 

of  Germany,  398,  400. 
Union  workmen,   earnings  of,  312. 
Unions,  inefficiency  of,  312. 
Unrest  in  America,  xiv. 
United   States  of  Europe,   17. 

Patent  office,   176. 

President  of,    12. 

Steel  Co.,  309. 


Value  of  German  methods,  412. 

of  immigration,  289. 

of   life,   50. 
Voluntary  insurance,  325. 


INDEX 


439 


Vasco  de  Gama,  394. 

Vaudeville,   66. 

Venereal  peril,  377. 

Vice-president,  152. 

Voice  of  America,  162. 

Volks  Hoch  Schule,  3'97. 

Volks  Schule,  395,  396. 

Voters'  representation,   156. 

Votes  of  naturalized  citizens,  114. 

W 

Wabash  River,  268. 

Wage  earners,  death  rate  of,  49. 

earnings  of,   193. 

in  Germanv,  320. 

in  U.  S.,  320. 
Wages,  average,  xxi. 
Wages  of  laborers,  308. 
Wagner,  Prof.  Adolph,  86. 
Wagner,  Richard,  239. 
Wagner-Smith  Commission,  307. 
Wall  Street,  228. 

financiers,  75. 
Walker,  Gen.  Francis  A.,  284. 
War  department,  301. 
Work   of  civilization,    xxiii. 

right  to,   xiv. 
Wash  sales,  227. 
Waste  of  administration,  22. 

of   natural  resources,  xiv. 

of  timber,  S'6. 

of  water  power,   262. 
Water  consumption,   56,  62. 
Water  power,  39,  42. 

of  principal  countries,   261. 

waste    of,   xvii. 
Wealth,  national,  75. 

of  the  people,  255. 


Wealth,   statistics  of,   78. 
Webster,  Pelatiah,  framer  of  consti- 
tution,  152. 
West  Point,  304. 
Whiskey,  367,  240. 
Whine  of  incompetency,  421. 
Whitlock,  Brand,  117.' 
Widows'     and     orphans'     insurance, 

316,  319,  328. 
Winkle,  Prof.,  336. 
Woman,  American,  374. 
Women's  boast,   347,  348. 

dress,   371. 

education  in  Germany,  398,  399. 

respect  for,  376. 

at  work,  51,  103,  306. 
Wards  of  the  public,   132. 
Work,  houses  of,  308,  309. 
Workman,  the,  182. 
Workingmen's  eating  time,   242. 

houses,  244. 

homes,  127. 

training,  198. 

value  of  the,  311. 
Working  people,  care  of,  317. 
Work,  the  right  to,  293. 

for  the  workingman,  293. 
World's  work,  23,  88,  179,  268. 
Wright  brothers,   177,   179. 


Yearly  fire  loss,  55. 
Yellow  peril,  387. 
Yield  of  the  farm,  40. 


Zeppelin,  Count,  179,  180. 


BY  THE  SAME  AUTHOR 

Electricity    for    the  Farm 
and  Home 

BY 

FRANK  KOESTER 

CONSULTING  ENGINEER 

16  MO.  PROFUSELY 

$1.00  NET.  ILLUSTRATED 

The  utilization  of  electricity  in  the  operation  of  the 
numerous  farm  and  domestic  appliances,  is  comprehensively 
treated  in  this  roliune.  Electricity  is  the  only  medium  that 
supplies  light,  heat,  and  power,  "in  the  form  of  power,  it 
is  cheaper  and  more  reliable  than  manual  or  animal  labor; 
it  is  the  safest  and  most  convenient  form  of  heat  and  the 
cheapest  and  most  eflPective  light.  It  permits  the  regulation 
of  working  hours  and  renders  life  on  the  farm  far  more  con- 
genial and  attractive  than  it  has  been  in  the  past,  while  at  the 
same  time  it  greatly  increases  agricultural  efficiency.  This 
book  is  a  pioneer  work,  being  the  first  that  has  been  pub- 
lished on  the  subject, 

TABLE   OF   CONTEXTS. 
Chapter 

i     ixtroductiox 
II     Cextral   Statiox    SER\nCE 

III  Gexerattxo  Exictric  Power 

IV  Electric  Motor  Appucatioxs 

V  Cost  of  Operating  Electric  Dritex  Farm  Machixert 

VI  Electricity     ix     the     Maxltactl-re     of     Farm     By- 
products 

VII  Electricity   ix   the    Pheservatiox   of   Farm   Product* 

VIII  Electric  Traxsportatiox   of  Farm   Products 

IX  Electric   Plowixg 

X  Eu:ctric   Power  ix   Irbigatiox 

XI  Electric   Stimulatiox   of  Vegetatiox 

XII  Dm:RSE   Applicatioxs  of  Electricity 

XIII  Electric  Heatixg 

XIV  Electric  Lighting 

XV     The  Telephone   ix   Rural  Commuxfties 

"Within  recent  years  a  great  deal  of  attention  has  been 
directed  toward  a'  study  of  opportunities  for  increasing  the 
use  of  electrical  energj-  in  rural  communities.  Among  those 
who  have  given  this  subject  special  study  and  to  whose 
energy  and  perseverance  much  of  the  development  which  has 
taken"  place  is  due,  is  Frank  Koester,  consulting  engineer  of 
New   York"  .  .  .  Electrical   Review    and    Western    Electrician. 


BY  THE  SAME  AUTHOR 

American  City  Planning 

BY 

FRANK  KOESTER 

CONSULTING  ENGINEER 

City  planning  is  not  a  subject  for  the  architect  and  en- 
gineer alone;  it  has  a  close  personal  interest  for  all  who 
take  any  pride  in  the  cities  in  which  they  live.  Public  wel- 
fare largely  depends  upon  proper  city  planning  and  in  addi- 
tion, it  is  a  business  proposition  of  the  first  importance. 

This  book  which  is  a  pioneer  work  in  many  branches  of 
the  subject,  covers  the  whole  field  comprehensively  including 
the  latest  American  and  European  practice.  It  is  pro- 
fusely illustrated  and  is  as  interesting  if  not  more  so  to  the 
general  reader  as  it  is  to  the  specialist. 

TABLE  OF  CONTENTS 

Preface.  Introduction.  What  City  Planning  Is.  How  to 
Proceed  in  Replanning  a  City.  Financing  Civic  Improvements. 
Valuation  of  Public  Utilities.  The  Civic  Centers.  The  Great 
Ground  Plan.  Arterial  Highways.  Streets  Up-to-Date.  Har- 
bors and  Water  Fronts.  Traffic  and  Transportation.  Open 
Squares  and  Traffic  Regulation.  Park  Systems.  Civic  Em- 
bellishment. Building  Regulation  and  Block  Plans.  Garden 
Cities  and  Workingmen's  Colonies.  Civic  Culture.  Adminis- 
trative Functions.  Communal  Industries.  Planning  of  Grow- 
ing To\vns.  City  Construction  and  Maintenance.  Street  Con- 
structions. Sewer  and  Sewage  Disposal.  Care  of  Streets. 
Street  Cleaning.  Refuse  Disposal.  Water  Supply.  Gas 
Works.     Electric  Generating  Plants.     Electric  Street  Railway. 

SOME  OPINIONS 

The  great  part  played  by  engineering  in  city  planning  is  not 
fully  appreciated,  except  by  those  who  have  had  direct  experi- 
ence in  such  undertakings.  The  installation  of  the  necessary 
utilities  and  their  efficient  operation  and  maintenance  are  of 
fundamental  importance.  The  author  has  had  considerable 
exi>erience  with  municipal  undertakings  abroad,  and  gives  spe- 
cial emphasis  to  lessons  which  American  cities  may  learn  from 
European  practice. — The  American  City. 

The  series  of  articles  on  Town  Planning  by  Mr.  Frank 
Koester,  that  now  are  appearing  in  The  American  Architect, 
will  be  found  to  constitute  an  authoritative  and  instructive 
discussion  of  a  subject  that  is  becoming  increasingly  impor- 
tant to  arcliitects.  Mr.  Koester's  researches  in  connection  with 
the  subject  of  Town  Planning  have  been  extended  over  a 
period  of  years  and  his  articles  are  the  result  of  study  by  a 
technically  trained  but  eminently  practical  man. — The  Ameri- 
can Architect. 


BY  THE   SAME  AUTHOR 


Hydroelectric  Developments 
and  Engineering 


BY 

FRANK  KOESTER 

8x11  INCHES  479  PAGES 

500  ILLUSTRATIONS  PRICE,  $5.00  NET 

Forty  Per  Cent,  of  This  Information 
Pertains  to  European  Practice 

SOME  OPINIONS 

"At  this  time,  when  attention  is  strongly  being  drawn 
toward  the  necessity  of  a  strict  economy  in  the  conservation 
of  national  resources,  such  a  book  is  timely.  The  author  ha» 
not  only  given  many  examples  of  the  most  instructive  types 
in  modern  practice,  but  he  has  written  the  book  in  a  lucid 
and  entertaining  manner  and  it  will  undoubtedly  form  a  valu- 
able addition  to  technical  literature." — Indicator,  Stevens  In- 
stitute of  Technology,  Hoboken,  N.  J. 

"This  work  dealing  with  a  subject  of  great  interest  to  en- 
gineers in  all  lines  of  professional  work,  is  written  by  a  man 
who  is  evidently  well  acquainted  with  both  the  principles  and 
practice  of  this  important  branch  of  engineering.  The  plan 
of  the  book  is  excellent,  the  main  features  of  the  subject  being 
so  grouped  as  to  afford  a  clear,  logical  exposition  of  the  whole." 
— The  School  of  Mines  Quarterly,  Columbia  University,  New 
York. 

"Mr.  Koester  has  made  an  exhaustive  study  of  the  evolution 
of  the  past  15  to  20  years  in  the  great  field  of  hydroelectric 
development,  and  has  brought  his  material  into  compact,  se- 
quential form,  with  the  result  that  we  are  indebted  to  him 
for  an  exceedingly  interesting  volume.  What  constitutes  its 
value  in  no  small  degree  is  the  international  nature  of  its  data. 
The  reader  will  find  in  this  handsome,  well- written,  well-in- 
dexed volume  the  latest  ideas,  'fads  and  fancies,'  and  real 
scientific  triumphs  of  the  hydroelectric  art." — Electrical  World, 
New  York. 


BY  THE   SAME  AUTHOR 

Steam-Electric  Power  Plants 

BY 

FRANK  KOESTER 

8x11  INCHES  473  PAGES 

500  ILLUSTRATIONS  PRICE,  $5.00  NET 

Recommended  by  Technical  Journals 

to  Experts    and  Advanced  Engineers 

Adopted  as  a  Text  by  Leading  Universities 

SOME  OPINIONS 

"This  book  will  undoubtedly  take  a  high  place  among  the 
classical  works  of  the  industry.  It  is  evidently  the  result 
of  an  exceptional  experience,  such  as  falls  to  the  lot  of  a  very 
few  engineers,  and  the  broad-minded  and  liberal  manner  in 
which  various  equipments  are  described  and  criticized  is  most 
refreshing.  It  is  set  out  from  the  beginning  that  no  hard 
and  fast  rules  can  be  prescribed  for  power  plant  designs,  as 
hardly  any  two  electric  services  have  similar  conditions  and 
requirements.  It  is  to  be  highly  commended,  not  only  to 
those  engaged  in  the  design  of  power  plants,  but  to  those 
engaged  in  their  operation." — The  Electrician,  London. 

"The  author  really  does  more  than  carry  his  immediate 
object,  for  the  volume  contains  a  good  deal  more  that  may 
not  be  'essential'  to  the  engineer,  but  is  nevertheless  instruc- 
tive and  useful.  The  treatment  of  the  subject  is  systematic." 
— Engineering,   London. 

"It  would  be  difficult  to  mention  any  detail  that  is  not 
touched  upon  and  its  relation  to  other  details  in  the  entire 
field  of  central-station  design  and  equipment.  Illustrations 
are  chosen  with  mature  judgment." — Power  and  The  Engineer, 
New  York. 

"A  long-felt  want  has  been  met  with  the  issue  of  this  work, 
as  it  supplies  the  consulting  engineer,  as  well  as  contractors 
and  manufacturers,  with  complete  and  comprehensive  informa- 
tion as  to  the  design,  construction  and  operation  of  steam- 
electric  power  plants.  Mr.  Koester  has  an  international  repu- 
tation in  the  engineering  profession,  and  the  manner  in  which 
the  whole  subject  has  been  treated  by  him,  embracing  the 
entire  field,  from  the  coal  pile  to  the  bus-bars,  is  fully  up  to 
his  high  sta.nda.rd."~Electrical  Review,  New  York 


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